Correlation Between Centuria Capital and Insignia Financial
Can any of the company-specific risk be diversified away by investing in both Centuria Capital and Insignia Financial 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 Centuria Capital and Insignia Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centuria Capital and Insignia Financial, you can compare the effects of market volatilities on Centuria Capital and Insignia Financial 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 Centuria Capital with a short position of Insignia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centuria Capital and Insignia Financial.
Diversification Opportunities for Centuria Capital and Insignia Financial
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Centuria and Insignia is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Capital and Insignia Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insignia Financial and Centuria Capital 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 Centuria Capital are associated (or correlated) with Insignia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insignia Financial has no effect on the direction of Centuria Capital i.e., Centuria Capital and Insignia Financial go up and down completely randomly.
Pair Corralation between Centuria Capital and Insignia Financial
Assuming the 90 days trading horizon Centuria Capital is expected to generate 0.92 times more return on investment than Insignia Financial. However, Centuria Capital is 1.09 times less risky than Insignia Financial. It trades about 0.19 of its potential returns per unit of risk. Insignia Financial is currently generating about -0.12 per unit of risk. If you would invest 183.00 in Centuria Capital on September 3, 2024 and sell it today you would earn a total of 12.00 from holding Centuria Capital or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centuria Capital vs. Insignia Financial
Performance |
| Timeline |
| Centuria Capital |
| Insignia Financial |
Centuria Capital and Insignia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centuria Capital and Insignia Financial
The main advantage of trading using opposite Centuria Capital and Insignia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Capital position performs unexpectedly, Insignia Financial 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 Insignia Financial will offset losses from the drop in Insignia Financial's long position.| Centuria Capital vs. G8 Education | Centuria Capital vs. Farm Pride Foods | Centuria Capital vs. Richmond Vanadium Technology | Centuria Capital vs. Qbe Insurance Group |
| Insignia Financial vs. Audio Pixels Holdings | Insignia Financial vs. Iodm | Insignia Financial vs. TTG Fintech | Insignia Financial vs. Mantle Minerals Limited |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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