Correlation Between Centamin PLC and AfriTin Mining
Can any of the company-specific risk be diversified away by investing in both Centamin PLC and AfriTin Mining 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 Centamin PLC and AfriTin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centamin PLC and AfriTin Mining, you can compare the effects of market volatilities on Centamin PLC and AfriTin Mining 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 Centamin PLC with a short position of AfriTin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centamin PLC and AfriTin Mining.
Diversification Opportunities for Centamin PLC and AfriTin Mining
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Centamin and AfriTin is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Centamin PLC and AfriTin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfriTin Mining and Centamin PLC 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 Centamin PLC are associated (or correlated) with AfriTin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfriTin Mining has no effect on the direction of Centamin PLC i.e., Centamin PLC and AfriTin Mining go up and down completely randomly.
Pair Corralation between Centamin PLC and AfriTin Mining
Assuming the 90 days trading horizon Centamin PLC is expected to generate 0.86 times more return on investment than AfriTin Mining. However, Centamin PLC is 1.17 times less risky than AfriTin Mining. It trades about 0.07 of its potential returns per unit of risk. AfriTin Mining is currently generating about -0.16 per unit of risk. If you would invest 11,874 in Centamin PLC on August 28, 2024 and sell it today you would earn a total of 2,726 from holding Centamin PLC or generate 22.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centamin PLC vs. AfriTin Mining
Performance |
| Timeline |
| Centamin PLC |
| AfriTin Mining |
Centamin PLC and AfriTin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centamin PLC and AfriTin Mining
The main advantage of trading using opposite Centamin PLC and AfriTin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centamin PLC position performs unexpectedly, AfriTin Mining 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 AfriTin Mining will offset losses from the drop in AfriTin Mining's long position.| Centamin PLC vs. Tata Steel Limited | Centamin PLC vs. Cardinal Health | Centamin PLC vs. Target Healthcare REIT | Centamin PLC vs. Ironveld Plc |
| AfriTin Mining vs. Givaudan SA | AfriTin Mining vs. Antofagasta PLC | AfriTin Mining vs. Centamin PLC | AfriTin Mining vs. Atalaya 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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