Correlation Between Fibra UNO and Centrica Plc
Can any of the company-specific risk be diversified away by investing in both Fibra UNO and Centrica Plc 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 Fibra UNO and Centrica Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fibra UNO and Centrica plc, you can compare the effects of market volatilities on Fibra UNO and Centrica Plc 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 Fibra UNO with a short position of Centrica Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fibra UNO and Centrica Plc.
Diversification Opportunities for Fibra UNO and Centrica Plc
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fibra and Centrica is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Fibra UNO and Centrica plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrica plc and Fibra UNO 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 Fibra UNO are associated (or correlated) with Centrica Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrica plc has no effect on the direction of Fibra UNO i.e., Fibra UNO and Centrica Plc go up and down completely randomly.
Pair Corralation between Fibra UNO and Centrica Plc
Assuming the 90 days horizon Fibra UNO is expected to under-perform the Centrica Plc. In addition to that, Fibra UNO is 1.23 times more volatile than Centrica plc. It trades about -0.03 of its total potential returns per unit of risk. Centrica plc is currently generating about 0.01 per unit of volatility. If you would invest 158.00 in Centrica plc on September 3, 2024 and sell it today you would lose (4.00) from holding Centrica plc or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 92.25% |
| Values | Daily Returns |
Fibra UNO vs. Centrica plc
Performance |
| Timeline |
| Fibra UNO |
| Centrica plc |
Fibra UNO and Centrica Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fibra UNO and Centrica Plc
The main advantage of trading using opposite Fibra UNO and Centrica Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fibra UNO position performs unexpectedly, Centrica Plc 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 Centrica Plc will offset losses from the drop in Centrica Plc's long position.| Fibra UNO vs. British Land | Fibra UNO vs. Global Net Lease, | Fibra UNO vs. VICI Properties | Fibra UNO vs. British Land |
| Centrica Plc vs. Vistra Energy Corp | Centrica Plc vs. Fibra UNO | Centrica Plc vs. Lloyds Banking Group | Centrica Plc vs. PT Kalbe Farma |
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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