Correlation Between Centrum Finansowe and Cloud Technologies
Can any of the company-specific risk be diversified away by investing in both Centrum Finansowe and Cloud Technologies 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 Centrum Finansowe and Cloud Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrum Finansowe Banku and Cloud Technologies SA, you can compare the effects of market volatilities on Centrum Finansowe and Cloud Technologies 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 Centrum Finansowe with a short position of Cloud Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrum Finansowe and Cloud Technologies.
Diversification Opportunities for Centrum Finansowe and Cloud Technologies
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Centrum and Cloud is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Centrum Finansowe Banku and Cloud Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloud Technologies and Centrum Finansowe 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 Centrum Finansowe Banku are associated (or correlated) with Cloud Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloud Technologies has no effect on the direction of Centrum Finansowe i.e., Centrum Finansowe and Cloud Technologies go up and down completely randomly.
Pair Corralation between Centrum Finansowe and Cloud Technologies
Assuming the 90 days trading horizon Centrum Finansowe Banku is expected to generate 0.89 times more return on investment than Cloud Technologies. However, Centrum Finansowe Banku is 1.13 times less risky than Cloud Technologies. It trades about 0.03 of its potential returns per unit of risk. Cloud Technologies SA is currently generating about -0.08 per unit of risk. If you would invest 500.00 in Centrum Finansowe Banku on December 30, 2024 and sell it today you would earn a total of 5.00 from holding Centrum Finansowe Banku or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Centrum Finansowe Banku vs. Cloud Technologies SA
Performance |
| Timeline |
| Centrum Finansowe Banku |
| Cloud Technologies |
Centrum Finansowe and Cloud Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrum Finansowe and Cloud Technologies
The main advantage of trading using opposite Centrum Finansowe and Cloud Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrum Finansowe position performs unexpectedly, Cloud Technologies 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 Cloud Technologies will offset losses from the drop in Cloud Technologies' long position.| Centrum Finansowe vs. Play2Chill SA | ||
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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