Correlation Between Celanese and Centerra Gold
Can any of the company-specific risk be diversified away by investing in both Celanese and Centerra Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Celanese and Centerra Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celanese and Centerra Gold, you can compare the effects of market volatilities on Celanese and Centerra Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Celanese with a short position of Centerra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celanese and Centerra Gold.
Diversification Opportunities for Celanese and Centerra Gold
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Celanese and Centerra is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Celanese and Centerra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerra Gold and Celanese is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Celanese are associated (or correlated) with Centerra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerra Gold has no effect on the direction of Celanese i.e., Celanese and Centerra Gold go up and down completely randomly.
Pair Corralation between Celanese and Centerra Gold
Allowing for the 90-day total investment horizon Celanese is expected to under-perform the Centerra Gold. In addition to that, Celanese is 1.88 times more volatile than Centerra Gold. It trades about -0.29 of its total potential returns per unit of risk. Centerra Gold is currently generating about -0.15 per unit of volatility. If you would invest 710.00 in Centerra Gold on August 30, 2024 and sell it today you would lose (111.00) from holding Centerra Gold or give up 15.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celanese vs. Centerra Gold
Performance |
| Timeline |
| Celanese |
| Centerra Gold |
Celanese and Centerra Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celanese and Centerra Gold
The main advantage of trading using opposite Celanese and Centerra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celanese position performs unexpectedly, Centerra Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Centerra Gold will offset losses from the drop in Centerra Gold's long position.| Celanese vs. Tronox Holdings PLC | Celanese vs. Green Plains Renewable | Celanese vs. Lsb Industries | Celanese vs. Valhi Inc |
| Centerra Gold vs. Gold Fields Ltd | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. Osisko Gold Ro | Centerra Gold vs. SSR Mining |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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