Correlation Between Centaurus Metals and Suncorp
Can any of the company-specific risk be diversified away by investing in both Centaurus Metals and Suncorp 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 Suncorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaurus Metals and Suncorp Group, you can compare the effects of market volatilities on Centaurus Metals and Suncorp 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 Suncorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaurus Metals and Suncorp.
Diversification Opportunities for Centaurus Metals and Suncorp
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Centaurus and Suncorp is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals and Suncorp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suncorp Group 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 Suncorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suncorp Group has no effect on the direction of Centaurus Metals i.e., Centaurus Metals and Suncorp go up and down completely randomly.
Pair Corralation between Centaurus Metals and Suncorp
Assuming the 90 days trading horizon Centaurus Metals is expected to under-perform the Suncorp. In addition to that, Centaurus Metals is 4.37 times more volatile than Suncorp Group. It trades about -0.01 of its total potential returns per unit of risk. Suncorp Group is currently generating about 0.14 per unit of volatility. If you would invest 1,573 in Suncorp Group on September 1, 2024 and sell it today you would earn a total of 397.00 from holding Suncorp Group or generate 25.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Centaurus Metals vs. Suncorp Group
Performance |
| Timeline |
| Centaurus Metals |
| Suncorp Group |
Centaurus Metals and Suncorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaurus Metals and Suncorp
The main advantage of trading using opposite Centaurus Metals and Suncorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaurus Metals position performs unexpectedly, Suncorp 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 Suncorp will offset losses from the drop in Suncorp's long position.| Centaurus Metals vs. Charter Hall Retail | Centaurus Metals vs. Kkr Credit Income | Centaurus Metals vs. Auswide Bank | Centaurus Metals vs. Commonwealth Bank of |
| Suncorp vs. EP Financial Group | Suncorp vs. Super Retail Group | Suncorp vs. Macquarie Bank Limited | Suncorp vs. Kkr Credit Income |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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