Correlation Between Centaurus Metals and Nufarm Finance
Can any of the company-specific risk be diversified away by investing in both Centaurus Metals and Nufarm Finance 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 Nufarm Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaurus Metals and Nufarm Finance NZ, you can compare the effects of market volatilities on Centaurus Metals and Nufarm Finance 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 Nufarm Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaurus Metals and Nufarm Finance.
Diversification Opportunities for Centaurus Metals and Nufarm Finance
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Centaurus and Nufarm is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals and Nufarm Finance NZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm Finance NZ 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 Nufarm Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm Finance NZ has no effect on the direction of Centaurus Metals i.e., Centaurus Metals and Nufarm Finance go up and down completely randomly.
Pair Corralation between Centaurus Metals and Nufarm Finance
Assuming the 90 days trading horizon Centaurus Metals is expected to under-perform the Nufarm Finance. In addition to that, Centaurus Metals is 5.8 times more volatile than Nufarm Finance NZ. It trades about -0.04 of its total potential returns per unit of risk. Nufarm Finance NZ is currently generating about 0.05 per unit of volatility. If you would invest 7,781 in Nufarm Finance NZ on October 13, 2024 and sell it today you would earn a total of 1,519 from holding Nufarm Finance NZ or generate 19.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Centaurus Metals vs. Nufarm Finance NZ
Performance |
Timeline |
Centaurus Metals |
Nufarm Finance NZ |
Centaurus Metals and Nufarm Finance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Centaurus Metals and Nufarm Finance
The main advantage of trading using opposite Centaurus Metals and Nufarm Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaurus Metals position performs unexpectedly, Nufarm Finance 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 Nufarm Finance will offset losses from the drop in Nufarm Finance's long position.Centaurus Metals vs. BlackWall Property Funds | Centaurus Metals vs. Metro Mining | Centaurus Metals vs. Andean Silver Limited | Centaurus Metals vs. Auctus Alternative Investments |
Nufarm Finance vs. Retail Food Group | Nufarm Finance vs. Flagship Investments | Nufarm Finance vs. Falcon Metals | Nufarm Finance vs. Centaurus Metals |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |