Correlation Between Enter Air and Centrum Finansowe
Can any of the company-specific risk be diversified away by investing in both Enter Air and Centrum Finansowe 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 Enter Air and Centrum Finansowe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enter Air SA and Centrum Finansowe Banku, you can compare the effects of market volatilities on Enter Air and Centrum Finansowe 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 Enter Air with a short position of Centrum Finansowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enter Air and Centrum Finansowe.
Diversification Opportunities for Enter Air and Centrum Finansowe
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enter and Centrum is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Enter Air SA and Centrum Finansowe Banku in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrum Finansowe Banku and Enter Air 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 Enter Air SA are associated (or correlated) with Centrum Finansowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrum Finansowe Banku has no effect on the direction of Enter Air i.e., Enter Air and Centrum Finansowe go up and down completely randomly.
Pair Corralation between Enter Air and Centrum Finansowe
Assuming the 90 days trading horizon Enter Air is expected to generate 1.64 times less return on investment than Centrum Finansowe. But when comparing it to its historical volatility, Enter Air SA is 1.11 times less risky than Centrum Finansowe. It trades about 0.04 of its potential returns per unit of risk. Centrum Finansowe Banku is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 369.00 in Centrum Finansowe Banku on September 2, 2024 and sell it today you would earn a total of 211.00 from holding Centrum Finansowe Banku or generate 57.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.46% |
| Values | Daily Returns |
Enter Air SA vs. Centrum Finansowe Banku
Performance |
| Timeline |
| Enter Air SA |
| Centrum Finansowe Banku |
Enter Air and Centrum Finansowe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enter Air and Centrum Finansowe
The main advantage of trading using opposite Enter Air and Centrum Finansowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enter Air position performs unexpectedly, Centrum Finansowe 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 Centrum Finansowe will offset losses from the drop in Centrum Finansowe's long position.| Enter Air vs. Monnari Trade SA | Enter Air vs. Igoria Trade SA | Enter Air vs. Gaming Factory SA | Enter Air vs. Kool2play SA |
| Centrum Finansowe vs. Asseco Business Solutions | Centrum Finansowe vs. Detalion Games SA | Centrum Finansowe vs. Asseco South Eastern | Centrum Finansowe vs. CFI Holding SA |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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