Correlation Between Fossil and Centerra Gold
Can any of the company-specific risk be diversified away by investing in both Fossil and Centerra Gold 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 Fossil and Centerra Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fossil Group and Centerra Gold, you can compare the effects of market volatilities on Fossil and Centerra Gold 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 Fossil with a short position of Centerra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fossil and Centerra Gold.
Diversification Opportunities for Fossil and Centerra Gold
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fossil and Centerra is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Fossil Group and Centerra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerra Gold and Fossil 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 Fossil Group are associated (or correlated) with Centerra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerra Gold has no effect on the direction of Fossil i.e., Fossil and Centerra Gold go up and down completely randomly.
Pair Corralation between Fossil and Centerra Gold
Given the investment horizon of 90 days Fossil Group is expected to generate 1.74 times more return on investment than Centerra Gold. However, Fossil is 1.74 times more volatile than Centerra Gold. It trades about 0.04 of its potential returns per unit of risk. Centerra Gold is currently generating about -0.25 per unit of risk. If you would invest 113.00 in Fossil Group on August 24, 2024 and sell it today you would earn a total of 2.00 from holding Fossil Group or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fossil Group vs. Centerra Gold
Performance |
| Timeline |
| Fossil Group |
| Centerra Gold |
Fossil and Centerra Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fossil and Centerra Gold
The main advantage of trading using opposite Fossil and Centerra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fossil position performs unexpectedly, Centerra Gold 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 Centerra Gold will offset losses from the drop in Centerra Gold's long position.| Fossil vs. Lanvin Group Holdings | Fossil vs. Signet Jewelers | Fossil vs. Tapestry | Fossil vs. Capri Holdings |
| Centerra Gold vs. Gold Fields Ltd | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. Osisko Gold Ro | Centerra Gold vs. SSR Mining |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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