Correlation Between Centrum Finansowe and Hortico SA
Can any of the company-specific risk be diversified away by investing in both Centrum Finansowe and Hortico 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 Hortico 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 Hortico SA, you can compare the effects of market volatilities on Centrum Finansowe and Hortico 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 Hortico SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrum Finansowe and Hortico SA.
Diversification Opportunities for Centrum Finansowe and Hortico SA
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centrum and Hortico is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Centrum Finansowe Banku and Hortico SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hortico 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 Hortico SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hortico SA has no effect on the direction of Centrum Finansowe i.e., Centrum Finansowe and Hortico SA go up and down completely randomly.
Pair Corralation between Centrum Finansowe and Hortico SA
Assuming the 90 days trading horizon Centrum Finansowe Banku is expected to generate 1.25 times more return on investment than Hortico SA. However, Centrum Finansowe is 1.25 times more volatile than Hortico SA. It trades about 0.06 of its potential returns per unit of risk. Hortico SA is currently generating about 0.06 per unit of risk. If you would invest 369.00 in Centrum Finansowe Banku on September 2, 2024 and sell it today you would earn a total of 211.00 from holding Centrum Finansowe Banku or generate 57.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.88% |
| Values | Daily Returns |
Centrum Finansowe Banku vs. Hortico SA
Performance |
| Timeline |
| Centrum Finansowe Banku |
| Hortico SA |
Centrum Finansowe and Hortico SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrum Finansowe and Hortico SA
The main advantage of trading using opposite Centrum Finansowe and Hortico SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrum Finansowe position performs unexpectedly, Hortico 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 Hortico SA will offset losses from the drop in Hortico SA's long position.| Centrum Finansowe vs. Asseco Business Solutions | Centrum Finansowe vs. Detalion Games SA | Centrum Finansowe vs. Asseco South Eastern | Centrum Finansowe vs. CFI Holding 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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