Correlation Between Dug Technology and Centaurus Metals
Can any of the company-specific risk be diversified away by investing in both Dug Technology and Centaurus Metals 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 Dug Technology and Centaurus Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dug Technology and Centaurus Metals, you can compare the effects of market volatilities on Dug Technology and Centaurus Metals 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 Dug Technology with a short position of Centaurus Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dug Technology and Centaurus Metals.
Diversification Opportunities for Dug Technology and Centaurus Metals
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dug and Centaurus is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dug Technology and Centaurus Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaurus Metals and Dug Technology 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 Dug Technology are associated (or correlated) with Centaurus Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaurus Metals has no effect on the direction of Dug Technology i.e., Dug Technology and Centaurus Metals go up and down completely randomly.
Pair Corralation between Dug Technology and Centaurus Metals
Assuming the 90 days trading horizon Dug Technology is expected to under-perform the Centaurus Metals. But the stock apears to be less risky and, when comparing its historical volatility, Dug Technology is 1.35 times less risky than Centaurus Metals. The stock trades about -0.21 of its potential returns per unit of risk. The Centaurus Metals is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Centaurus Metals on October 11, 2024 and sell it today you would lose (5.00) from holding Centaurus Metals or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dug Technology vs. Centaurus Metals
Performance |
| Timeline |
| Dug Technology |
| Centaurus Metals |
Dug Technology and Centaurus Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dug Technology and Centaurus Metals
The main advantage of trading using opposite Dug Technology and Centaurus Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dug Technology position performs unexpectedly, Centaurus Metals 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 Centaurus Metals will offset losses from the drop in Centaurus Metals' long position.| Dug Technology vs. Andean Silver Limited | Dug Technology vs. Perseus Mining | Dug Technology vs. 4Dmedical | Dug Technology vs. Gold Road Resources |
| Centaurus Metals vs. Air New Zealand | Centaurus Metals vs. Ainsworth Game Technology | Centaurus Metals vs. Dug Technology | Centaurus Metals vs. Hansen Technologies |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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