Correlation Between Edison Cobalt and Centaurus Metals
Can any of the company-specific risk be diversified away by investing in both Edison Cobalt 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 Edison Cobalt and Centaurus Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edison Cobalt Corp and Centaurus Metals Limited, you can compare the effects of market volatilities on Edison Cobalt 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 Edison Cobalt with a short position of Centaurus Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edison Cobalt and Centaurus Metals.
Diversification Opportunities for Edison Cobalt and Centaurus Metals
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Edison and Centaurus is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Edison Cobalt Corp and Centaurus Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaurus Metals and Edison Cobalt 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 Edison Cobalt Corp 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 Edison Cobalt i.e., Edison Cobalt and Centaurus Metals go up and down completely randomly.
Pair Corralation between Edison Cobalt and Centaurus Metals
Assuming the 90 days horizon Edison Cobalt Corp is expected to under-perform the Centaurus Metals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Edison Cobalt Corp is 1.37 times less risky than Centaurus Metals. The pink sheet trades about -0.17 of its potential returns per unit of risk. The Centaurus Metals Limited is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Centaurus Metals Limited on November 2, 2024 and sell it today you would earn a total of 6.00 from holding Centaurus Metals Limited or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Edison Cobalt Corp vs. Centaurus Metals Limited
Performance |
| Timeline |
| Edison Cobalt Corp |
| Centaurus Metals |
Edison Cobalt and Centaurus Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edison Cobalt and Centaurus Metals
The main advantage of trading using opposite Edison Cobalt and Centaurus Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edison Cobalt 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.| Edison Cobalt vs. Hannan Metals | Edison Cobalt vs. Atco Mining | Edison Cobalt vs. Leading Edge Materials | Edison Cobalt vs. Arianne Phosphate |
| Centaurus Metals vs. Edison Cobalt Corp | Centaurus Metals vs. Baroyeca Gold Silver | Centaurus Metals vs. Aurelia Metals Limited | Centaurus Metals vs. China Rare Earth |
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 Positions Ratings module to 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.
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