Correlation Between Centaurus Metals and Anax Metals
Can any of the company-specific risk be diversified away by investing in both Centaurus Metals and Anax Metals 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 Anax Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaurus Metals and Anax Metals, you can compare the effects of market volatilities on Centaurus Metals and Anax Metals 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 Anax Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaurus Metals and Anax Metals.
Diversification Opportunities for Centaurus Metals and Anax Metals
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centaurus and Anax is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals and Anax Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anax Metals 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 Anax Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anax Metals has no effect on the direction of Centaurus Metals i.e., Centaurus Metals and Anax Metals go up and down completely randomly.
Pair Corralation between Centaurus Metals and Anax Metals
Assuming the 90 days trading horizon Centaurus Metals is expected to generate 0.74 times more return on investment than Anax Metals. However, Centaurus Metals is 1.36 times less risky than Anax Metals. It trades about -0.03 of its potential returns per unit of risk. Anax Metals is currently generating about -0.05 per unit of risk. If you would invest 37.00 in Centaurus Metals on December 4, 2024 and sell it today you would lose (2.00) from holding Centaurus Metals or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centaurus Metals vs. Anax Metals
Performance |
| Timeline |
| Centaurus Metals |
| Anax Metals |
Centaurus Metals and Anax Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaurus Metals and Anax Metals
The main advantage of trading using opposite Centaurus Metals and Anax Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaurus Metals position performs unexpectedly, Anax Metals 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 Anax Metals will offset losses from the drop in Anax Metals' long position.| Centaurus Metals vs. Aeris Environmental | Centaurus Metals vs. Bailador Technology Invest | Centaurus Metals vs. Red Hill Iron | Centaurus Metals vs. Dug Technology |
| Anax Metals vs. COG Financial Services | Anax Metals vs. Ras Technology Holdings | Anax Metals vs. Cleanaway Waste Management | Anax Metals vs. Beston Global Food |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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