Correlation Between Centrex Metals and Red Hill
Can any of the company-specific risk be diversified away by investing in both Centrex Metals and Red Hill 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 Centrex Metals and Red Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrex Metals and Red Hill Iron, you can compare the effects of market volatilities on Centrex Metals and Red Hill 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 Centrex Metals with a short position of Red Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrex Metals and Red Hill.
Diversification Opportunities for Centrex Metals and Red Hill
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Centrex and Red is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Centrex Metals and Red Hill Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Hill Iron and Centrex 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 Centrex Metals are associated (or correlated) with Red Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Hill Iron has no effect on the direction of Centrex Metals i.e., Centrex Metals and Red Hill go up and down completely randomly.
Pair Corralation between Centrex Metals and Red Hill
Assuming the 90 days trading horizon Centrex Metals is expected to under-perform the Red Hill. In addition to that, Centrex Metals is 1.75 times more volatile than Red Hill Iron. It trades about -0.08 of its total potential returns per unit of risk. Red Hill Iron is currently generating about -0.04 per unit of volatility. If you would invest 522.00 in Red Hill Iron on October 18, 2024 and sell it today you would lose (108.00) from holding Red Hill Iron or give up 20.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrex Metals vs. Red Hill Iron
Performance |
| Timeline |
| Centrex Metals |
| Red Hill Iron |
Centrex Metals and Red Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrex Metals and Red Hill
The main advantage of trading using opposite Centrex Metals and Red Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrex Metals position performs unexpectedly, Red Hill 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 Red Hill will offset losses from the drop in Red Hill's long position.| Centrex Metals vs. Aeris Environmental | Centrex Metals vs. Phoslock Environmental Technologies | Centrex Metals vs. Iron Road | Centrex Metals vs. Everest Metals |
| Red Hill vs. Aeon Metals | Red Hill vs. Centrex Metals | Red Hill vs. Insignia Financial | Red Hill vs. Black Rock Mining |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |