Correlation Between Centrum Finansowe and Develia SA
Can any of the company-specific risk be diversified away by investing in both Centrum Finansowe and Develia SA 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 Develia SA 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 Develia SA, you can compare the effects of market volatilities on Centrum Finansowe and Develia SA 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 Develia SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrum Finansowe and Develia SA.
Diversification Opportunities for Centrum Finansowe and Develia SA
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centrum and Develia is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Centrum Finansowe Banku and Develia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Develia SA 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 Develia SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Develia SA has no effect on the direction of Centrum Finansowe i.e., Centrum Finansowe and Develia SA go up and down completely randomly.
Pair Corralation between Centrum Finansowe and Develia SA
Assuming the 90 days trading horizon Centrum Finansowe Banku is expected to under-perform the Develia SA. In addition to that, Centrum Finansowe is 1.85 times more volatile than Develia SA. It trades about -0.1 of its total potential returns per unit of risk. Develia SA is currently generating about 0.09 per unit of volatility. If you would invest 575.00 in Develia SA on September 4, 2024 and sell it today you would earn a total of 17.00 from holding Develia SA or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrum Finansowe Banku vs. Develia SA
Performance |
| Timeline |
| Centrum Finansowe Banku |
| Develia SA |
Centrum Finansowe and Develia SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrum Finansowe and Develia SA
The main advantage of trading using opposite Centrum Finansowe and Develia SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrum Finansowe position performs unexpectedly, Develia SA 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 Develia SA will offset losses from the drop in Develia SA's long position.| Centrum Finansowe vs. Carlson Investments SA | Centrum Finansowe vs. Asseco Business Solutions | Centrum Finansowe vs. Kogeneracja SA | Centrum Finansowe vs. Asseco South Eastern |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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