Correlation Between Centamin PLC and Neometals
Can any of the company-specific risk be diversified away by investing in both Centamin PLC and Neometals 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 Neometals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centamin PLC and Neometals, you can compare the effects of market volatilities on Centamin PLC and Neometals 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 Neometals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centamin PLC and Neometals.
Diversification Opportunities for Centamin PLC and Neometals
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Centamin and Neometals is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Centamin PLC and Neometals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neometals 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 Neometals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neometals has no effect on the direction of Centamin PLC i.e., Centamin PLC and Neometals go up and down completely randomly.
Pair Corralation between Centamin PLC and Neometals
Assuming the 90 days trading horizon Centamin PLC is expected to under-perform the Neometals. In addition to that, Centamin PLC is 1.33 times more volatile than Neometals. It trades about -0.3 of its total potential returns per unit of risk. Neometals is currently generating about 0.01 per unit of volatility. If you would invest 475.00 in Neometals on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Neometals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Centamin PLC vs. Neometals
Performance |
| Timeline |
| Centamin PLC |
| Neometals |
Centamin PLC and Neometals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centamin PLC and Neometals
The main advantage of trading using opposite Centamin PLC and Neometals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centamin PLC position performs unexpectedly, Neometals 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 Neometals will offset losses from the drop in Neometals' long position.| Centamin PLC vs. Givaudan SA | Centamin PLC vs. Antofagasta PLC | Centamin PLC vs. Atalaya Mining | Centamin PLC vs. Ferrexpo PLC |
| Neometals vs. Givaudan SA | Neometals vs. Antofagasta PLC | Neometals vs. Centamin PLC | Neometals 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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