Correlation Between Centaurus Metals and IperionX
Can any of the company-specific risk be diversified away by investing in both Centaurus Metals and IperionX 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 IperionX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaurus Metals and IperionX Limited, you can compare the effects of market volatilities on Centaurus Metals and IperionX 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 IperionX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaurus Metals and IperionX.
Diversification Opportunities for Centaurus Metals and IperionX
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Centaurus and IperionX is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals and IperionX Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IperionX Limited 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 IperionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IperionX Limited has no effect on the direction of Centaurus Metals i.e., Centaurus Metals and IperionX go up and down completely randomly.
Pair Corralation between Centaurus Metals and IperionX
Assuming the 90 days trading horizon Centaurus Metals is expected to under-perform the IperionX. In addition to that, Centaurus Metals is 1.13 times more volatile than IperionX Limited. It trades about -0.04 of its total potential returns per unit of risk. IperionX Limited is currently generating about 0.19 per unit of volatility. If you would invest 402.00 in IperionX Limited on September 13, 2024 and sell it today you would earn a total of 51.00 from holding IperionX Limited or generate 12.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centaurus Metals vs. IperionX Limited
Performance |
| Timeline |
| Centaurus Metals |
| IperionX Limited |
Centaurus Metals and IperionX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaurus Metals and IperionX
The main advantage of trading using opposite Centaurus Metals and IperionX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaurus Metals position performs unexpectedly, IperionX 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 IperionX will offset losses from the drop in IperionX's long position.| Centaurus Metals vs. Macquarie Technology Group | Centaurus Metals vs. WiseTech Global Limited | Centaurus Metals vs. RLF AgTech | Centaurus Metals vs. Kip McGrath Education |
| IperionX vs. EVE Health Group | IperionX vs. Platinum Asset Management | IperionX vs. Sonic Healthcare | IperionX vs. Pinnacle Investment Management |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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