Correlation Between Centaurus Metals and SPASX Emerging
Can any of the company-specific risk be diversified away by investing in both Centaurus Metals and SPASX Emerging 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 SPASX Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaurus Metals and SPASX Emerging Companies, you can compare the effects of market volatilities on Centaurus Metals and SPASX Emerging 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 SPASX Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaurus Metals and SPASX Emerging.
Diversification Opportunities for Centaurus Metals and SPASX Emerging
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centaurus and SPASX is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals and SPASX Emerging Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPASX Emerging Companies 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 SPASX Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPASX Emerging Companies has no effect on the direction of Centaurus Metals i.e., Centaurus Metals and SPASX Emerging go up and down completely randomly.
Pair Corralation between Centaurus Metals and SPASX Emerging
Assuming the 90 days trading horizon Centaurus Metals is expected to under-perform the SPASX Emerging. In addition to that, Centaurus Metals is 4.67 times more volatile than SPASX Emerging Companies. It trades about -0.03 of its total potential returns per unit of risk. SPASX Emerging Companies is currently generating about 0.03 per unit of volatility. If you would invest 206,190 in SPASX Emerging Companies on September 14, 2024 and sell it today you would earn a total of 23,080 from holding SPASX Emerging Companies or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Centaurus Metals vs. SPASX Emerging Companies
Performance |
| Timeline |
Centaurus Metals and SPASX Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Centaurus Metals
Pair trading matchups for Centaurus Metals
SPASX Emerging Companies
Pair trading matchups for SPASX Emerging
Pair Trading with Centaurus Metals and SPASX Emerging
The main advantage of trading using opposite Centaurus Metals and SPASX Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaurus Metals position performs unexpectedly, SPASX Emerging 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 SPASX Emerging will offset losses from the drop in SPASX Emerging's long position.| Centaurus Metals vs. Northern Star Resources | Centaurus Metals vs. Evolution Mining | Centaurus Metals vs. Bluescope Steel | Centaurus Metals vs. Sandfire Resources NL |
| SPASX Emerging vs. Centaurus Metals | SPASX Emerging vs. Spirit Telecom | SPASX Emerging vs. Australian Agricultural | SPASX Emerging vs. Emetals |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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