Correlation Between Centessa Pharmaceuticals and Golden Star
Can any of the company-specific risk be diversified away by investing in both Centessa Pharmaceuticals and Golden Star 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 Centessa Pharmaceuticals and Golden Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centessa Pharmaceuticals PLC and Golden Star Acquisition, you can compare the effects of market volatilities on Centessa Pharmaceuticals and Golden Star 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 Centessa Pharmaceuticals with a short position of Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centessa Pharmaceuticals and Golden Star.
Diversification Opportunities for Centessa Pharmaceuticals and Golden Star
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centessa and Golden is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Centessa Pharmaceuticals PLC and Golden Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star Acquisition and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC are associated (or correlated) with Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Acquisition has no effect on the direction of Centessa Pharmaceuticals i.e., Centessa Pharmaceuticals and Golden Star go up and down completely randomly.
Pair Corralation between Centessa Pharmaceuticals and Golden Star
Given the investment horizon of 90 days Centessa Pharmaceuticals PLC is expected to generate 0.14 times more return on investment than Golden Star. However, Centessa Pharmaceuticals PLC is 7.23 times less risky than Golden Star. It trades about -0.03 of its potential returns per unit of risk. Golden Star Acquisition is currently generating about -0.13 per unit of risk. If you would invest 1,750 in Centessa Pharmaceuticals PLC on November 3, 2024 and sell it today you would lose (58.00) from holding Centessa Pharmaceuticals PLC or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Centessa Pharmaceuticals PLC vs. Golden Star Acquisition
Performance |
| Timeline |
| Centessa Pharmaceuticals |
| Golden Star Acquisition |
Centessa Pharmaceuticals and Golden Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centessa Pharmaceuticals and Golden Star
The main advantage of trading using opposite Centessa Pharmaceuticals and Golden Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centessa Pharmaceuticals position performs unexpectedly, Golden Star 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 Golden Star will offset losses from the drop in Golden Star's long position.The idea behind Centessa Pharmaceuticals PLC and Golden Star Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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