Correlation Between Global Health and Centuria Capital
Can any of the company-specific risk be diversified away by investing in both Global Health and Centuria Capital 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 Global Health and Centuria Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Health and Centuria Capital, you can compare the effects of market volatilities on Global Health and Centuria Capital 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 Global Health with a short position of Centuria Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Health and Centuria Capital.
Diversification Opportunities for Global Health and Centuria Capital
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Centuria is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Global Health and Centuria Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centuria Capital and Global Health 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 Global Health are associated (or correlated) with Centuria Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centuria Capital has no effect on the direction of Global Health i.e., Global Health and Centuria Capital go up and down completely randomly.
Pair Corralation between Global Health and Centuria Capital
Assuming the 90 days trading horizon Global Health is expected to under-perform the Centuria Capital. In addition to that, Global Health is 1.61 times more volatile than Centuria Capital. It trades about -0.11 of its total potential returns per unit of risk. Centuria Capital is currently generating about 0.11 per unit of volatility. If you would invest 188.00 in Centuria Capital on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Centuria Capital or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Health vs. Centuria Capital
Performance |
| Timeline |
| Global Health |
| Centuria Capital |
Global Health and Centuria Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Health and Centuria Capital
The main advantage of trading using opposite Global Health and Centuria Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Health position performs unexpectedly, Centuria Capital 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 Centuria Capital will offset losses from the drop in Centuria Capital's long position.| Global Health vs. Aneka Tambang Tbk | Global Health vs. Woolworths | Global Health vs. Commonwealth Bank | Global Health vs. BHP Group Limited |
| Centuria Capital vs. Saferoads Holdings | Centuria Capital vs. Insignia Financial | Centuria Capital vs. Advanced Braking Technology | Centuria Capital vs. Prime Financial Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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