Correlation Between European Metals and Centaur Media
Can any of the company-specific risk be diversified away by investing in both European Metals and Centaur Media 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 European Metals and Centaur Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and Centaur Media, you can compare the effects of market volatilities on European Metals and Centaur Media 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 European Metals with a short position of Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Centaur Media.
Diversification Opportunities for European Metals and Centaur Media
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between European and Centaur is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media and European 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 European Metals Holdings are associated (or correlated) with Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of European Metals i.e., European Metals and Centaur Media go up and down completely randomly.
Pair Corralation between European Metals and Centaur Media
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the Centaur Media. In addition to that, European Metals is 1.45 times more volatile than Centaur Media. It trades about -0.09 of its total potential returns per unit of risk. Centaur Media is currently generating about -0.07 per unit of volatility. If you would invest 4,284 in Centaur Media on September 12, 2024 and sell it today you would lose (2,034) from holding Centaur Media or give up 47.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
European Metals Holdings vs. Centaur Media
Performance |
| Timeline |
| European Metals Holdings |
| Centaur Media |
European Metals and Centaur Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and Centaur Media
The main advantage of trading using opposite European Metals and Centaur Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals position performs unexpectedly, Centaur Media 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 Centaur Media will offset losses from the drop in Centaur Media's long position.| European Metals vs. National Bank of | European Metals vs. Alior Bank SA | European Metals vs. Solstad Offshore ASA | European Metals vs. St Galler Kantonalbank |
| Centaur Media vs. Catalyst Media Group | Centaur Media vs. CATLIN GROUP | Centaur Media vs. Tamburi Investment Partners | Centaur Media vs. Magnora ASA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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