Correlation Between Centre Global and Westwood Largecap
Can any of the company-specific risk be diversified away by investing in both Centre Global and Westwood Largecap 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 Centre Global and Westwood Largecap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centre Global Infrastructure and Westwood Largecap Value, you can compare the effects of market volatilities on Centre Global and Westwood Largecap 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 Centre Global with a short position of Westwood Largecap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centre Global and Westwood Largecap.
Diversification Opportunities for Centre Global and Westwood Largecap
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Centre and Westwood is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Centre Global Infrastructure and Westwood Largecap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwood Largecap Value and Centre Global 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 Centre Global Infrastructure are associated (or correlated) with Westwood Largecap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwood Largecap Value has no effect on the direction of Centre Global i.e., Centre Global and Westwood Largecap go up and down completely randomly.
Pair Corralation between Centre Global and Westwood Largecap
Assuming the 90 days horizon Centre Global Infrastructure is expected to generate 0.98 times more return on investment than Westwood Largecap. However, Centre Global Infrastructure is 1.02 times less risky than Westwood Largecap. It trades about 0.09 of its potential returns per unit of risk. Westwood Largecap Value is currently generating about 0.06 per unit of risk. If you would invest 947.00 in Centre Global Infrastructure on September 3, 2024 and sell it today you would earn a total of 300.00 from holding Centre Global Infrastructure or generate 31.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centre Global Infrastructure vs. Westwood Largecap Value
Performance |
| Timeline |
| Centre Global Infras |
| Westwood Largecap Value |
Centre Global and Westwood Largecap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centre Global and Westwood Largecap
The main advantage of trading using opposite Centre Global and Westwood Largecap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centre Global position performs unexpectedly, Westwood Largecap 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 Westwood Largecap will offset losses from the drop in Westwood Largecap's long position.| Centre Global vs. Pioneer High Yield | Centre Global vs. Pace High Yield | Centre Global vs. Guggenheim High Yield | Centre Global vs. Vanguard Star Fund |
| Westwood Largecap vs. Ab Bond Inflation | Westwood Largecap vs. Arrow Managed Futures | Westwood Largecap vs. Lord Abbett Inflation | Westwood Largecap vs. Guidepath Managed Futures |
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 CEOs Directory module to screen CEOs from public companies around the world.
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