Correlation Between Centerra Gold and Fossil
Can any of the company-specific risk be diversified away by investing in both Centerra Gold and Fossil 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 Centerra Gold and Fossil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centerra Gold and Fossil Group, you can compare the effects of market volatilities on Centerra Gold and Fossil 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 Centerra Gold with a short position of Fossil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centerra Gold and Fossil.
Diversification Opportunities for Centerra Gold and Fossil
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centerra and Fossil is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Centerra Gold and Fossil Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fossil Group and Centerra Gold 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 Centerra Gold are associated (or correlated) with Fossil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fossil Group has no effect on the direction of Centerra Gold i.e., Centerra Gold and Fossil go up and down completely randomly.
Pair Corralation between Centerra Gold and Fossil
Given the investment horizon of 90 days Centerra Gold is expected to under-perform the Fossil. But the stock apears to be less risky and, when comparing its historical volatility, Centerra Gold is 1.96 times less risky than Fossil. The stock trades about -0.03 of its potential returns per unit of risk. The Fossil Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 126.00 in Fossil Group on August 27, 2024 and sell it today you would earn a total of 3.00 from holding Fossil Group or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centerra Gold vs. Fossil Group
Performance |
| Timeline |
| Centerra Gold |
| Fossil Group |
Centerra Gold and Fossil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centerra Gold and Fossil
The main advantage of trading using opposite Centerra Gold and Fossil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centerra Gold position performs unexpectedly, Fossil 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 Fossil will offset losses from the drop in Fossil's long position.| Centerra Gold vs. Gold Fields Ltd | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. Osisko Gold Ro | Centerra Gold vs. SSR Mining |
| Fossil vs. Lanvin Group Holdings | Fossil vs. Signet Jewelers | Fossil vs. Tapestry | Fossil vs. Capri Holdings |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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