Correlation Between Centaurus Metals and ALS
Can any of the company-specific risk be diversified away by investing in both Centaurus Metals and ALS 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 Centaurus Metals and ALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaurus Metals and ALS, you can compare the effects of market volatilities on Centaurus Metals and ALS 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 Centaurus Metals with a short position of ALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaurus Metals and ALS.
Diversification Opportunities for Centaurus Metals and ALS
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centaurus and ALS is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals and ALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALS and Centaurus Metals 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 Centaurus Metals are associated (or correlated) with ALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALS has no effect on the direction of Centaurus Metals i.e., Centaurus Metals and ALS go up and down completely randomly.
Pair Corralation between Centaurus Metals and ALS
Assuming the 90 days trading horizon Centaurus Metals is expected to generate 2.88 times less return on investment than ALS. In addition to that, Centaurus Metals is 3.36 times more volatile than ALS. It trades about 0.01 of its total potential returns per unit of risk. ALS is currently generating about 0.07 per unit of volatility. If you would invest 1,404 in ALS on September 3, 2024 and sell it today you would earn a total of 180.00 from holding ALS or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centaurus Metals vs. ALS
Performance |
| Timeline |
| Centaurus Metals |
| ALS |
Centaurus Metals and ALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaurus Metals and ALS
The main advantage of trading using opposite Centaurus Metals and ALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaurus Metals position performs unexpectedly, ALS 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 ALS will offset losses from the drop in ALS's long position.| Centaurus Metals vs. Northern Star Resources | Centaurus Metals vs. Evolution Mining | Centaurus Metals vs. Bluescope Steel | Centaurus Metals vs. Aneka Tambang Tbk |
| ALS vs. Microequities Asset Management | ALS vs. Regal Funds Management | ALS vs. K2 Asset Management | ALS vs. My Foodie Box |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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