Correlation Between Ferrexpo PLC and Centamin PLC
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and Centamin 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 Ferrexpo PLC and Centamin PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and Centamin PLC, you can compare the effects of market volatilities on Ferrexpo PLC and Centamin 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 Ferrexpo PLC with a short position of Centamin PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and Centamin PLC.
Diversification Opportunities for Ferrexpo PLC and Centamin PLC
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ferrexpo and Centamin is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and Centamin PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centamin PLC and Ferrexpo PLC 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 Ferrexpo PLC are associated (or correlated) with Centamin PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centamin PLC has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and Centamin PLC go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and Centamin PLC
Assuming the 90 days trading horizon Ferrexpo PLC is expected to generate 3.66 times less return on investment than Centamin PLC. In addition to that, Ferrexpo PLC is 1.97 times more volatile than Centamin PLC. It trades about 0.01 of its total potential returns per unit of risk. Centamin PLC is currently generating about 0.08 per unit of volatility. If you would invest 8,559 in Centamin PLC on August 28, 2024 and sell it today you would earn a total of 6,041 from holding Centamin PLC or generate 70.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Ferrexpo PLC vs. Centamin PLC
Performance |
| Timeline |
| Ferrexpo PLC |
| Centamin PLC |
Ferrexpo PLC and Centamin PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and Centamin PLC
The main advantage of trading using opposite Ferrexpo PLC and Centamin PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, Centamin 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 Centamin PLC will offset losses from the drop in Centamin PLC's long position.| Ferrexpo PLC vs. Spirent Communications plc | Ferrexpo PLC vs. SBM Offshore NV | Ferrexpo PLC vs. Eastman Chemical Co | Ferrexpo PLC vs. Charter Communications Cl |
| Centamin PLC vs. Givaudan SA | Centamin PLC vs. Antofagasta PLC | Centamin PLC vs. Atalaya Mining | Centamin PLC vs. Amaroq Minerals |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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