Correlation Between Caledonia Investments and Centaur Media
Can any of the company-specific risk be diversified away by investing in both Caledonia Investments and Centaur Media 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 Caledonia Investments and Centaur Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Investments and Centaur Media, you can compare the effects of market volatilities on Caledonia Investments and Centaur Media 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 Caledonia Investments with a short position of Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Investments and Centaur Media.
Diversification Opportunities for Caledonia Investments and Centaur Media
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Caledonia and Centaur is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Investments and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media and Caledonia Investments 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 Caledonia Investments are associated (or correlated) with Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of Caledonia Investments i.e., Caledonia Investments and Centaur Media go up and down completely randomly.
Pair Corralation between Caledonia Investments and Centaur Media
Assuming the 90 days trading horizon Caledonia Investments is expected to generate 1.8 times less return on investment than Centaur Media. In addition to that, Caledonia Investments is 1.55 times more volatile than Centaur Media. It trades about 0.08 of its total potential returns per unit of risk. Centaur Media is currently generating about 0.23 per unit of volatility. If you would invest 2,300 in Centaur Media on October 14, 2024 and sell it today you would earn a total of 50.00 from holding Centaur Media or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caledonia Investments vs. Centaur Media
Performance |
| Timeline |
| Caledonia Investments |
| Centaur Media |
Caledonia Investments and Centaur Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Investments and Centaur Media
The main advantage of trading using opposite Caledonia Investments and Centaur Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Investments position performs unexpectedly, Centaur Media 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 Centaur Media will offset losses from the drop in Centaur Media's long position.| Caledonia Investments vs. Samsung Electronics Co | Caledonia Investments vs. Samsung Electronics Co | Caledonia Investments vs. Toyota Motor Corp | Caledonia Investments vs. MOL Hungarian Oil |
| Centaur Media vs. Datalogic | Centaur Media vs. EJF Investments | Centaur Media vs. Caledonia Investments | Centaur Media vs. Primorus Investments plc |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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