Correlation Between Centrica PLC and Odyssean Investment
Can any of the company-specific risk be diversified away by investing in both Centrica PLC and Odyssean Investment 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 Centrica PLC and Odyssean Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrica PLC and Odyssean Investment Trust, you can compare the effects of market volatilities on Centrica PLC and Odyssean Investment 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 Centrica PLC with a short position of Odyssean Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrica PLC and Odyssean Investment.
Diversification Opportunities for Centrica PLC and Odyssean Investment
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Centrica and Odyssean is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Centrica PLC and Odyssean Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssean Investment Trust and Centrica PLC 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 Centrica PLC are associated (or correlated) with Odyssean Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssean Investment Trust has no effect on the direction of Centrica PLC i.e., Centrica PLC and Odyssean Investment go up and down completely randomly.
Pair Corralation between Centrica PLC and Odyssean Investment
Assuming the 90 days trading horizon Centrica PLC is expected to generate 0.99 times more return on investment than Odyssean Investment. However, Centrica PLC is 1.01 times less risky than Odyssean Investment. It trades about 0.35 of its potential returns per unit of risk. Odyssean Investment Trust is currently generating about -0.05 per unit of risk. If you would invest 11,795 in Centrica PLC on September 13, 2024 and sell it today you would earn a total of 1,220 from holding Centrica PLC or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Centrica PLC vs. Odyssean Investment Trust
Performance |
| Timeline |
| Centrica PLC |
| Odyssean Investment Trust |
Centrica PLC and Odyssean Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrica PLC and Odyssean Investment
The main advantage of trading using opposite Centrica PLC and Odyssean Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrica PLC position performs unexpectedly, Odyssean Investment 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 Odyssean Investment will offset losses from the drop in Odyssean Investment's long position.| Centrica PLC vs. Indutrade AB | Centrica PLC vs. Various Eateries PLC | Centrica PLC vs. Supermarket Income REIT | Centrica PLC vs. Ecclesiastical Insurance Office |
| Odyssean Investment vs. Catalyst Media Group | Odyssean Investment vs. CATLIN GROUP | Odyssean Investment vs. Tamburi Investment Partners | Odyssean Investment vs. Magnora ASA |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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