Correlation Between MFF Capital and Centaurus Metals
Can any of the company-specific risk be diversified away by investing in both MFF Capital and Centaurus Metals 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 MFF Capital and Centaurus Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFF Capital Investments and Centaurus Metals, you can compare the effects of market volatilities on MFF Capital and Centaurus Metals 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 MFF Capital with a short position of Centaurus Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and Centaurus Metals.
Diversification Opportunities for MFF Capital and Centaurus Metals
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between MFF and Centaurus is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and Centaurus Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaurus Metals and MFF Capital 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 MFF Capital Investments are associated (or correlated) with Centaurus Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaurus Metals has no effect on the direction of MFF Capital i.e., MFF Capital and Centaurus Metals go up and down completely randomly.
Pair Corralation between MFF Capital and Centaurus Metals
Assuming the 90 days trading horizon MFF Capital Investments is expected to generate 0.26 times more return on investment than Centaurus Metals. However, MFF Capital Investments is 3.86 times less risky than Centaurus Metals. It trades about 0.31 of its potential returns per unit of risk. Centaurus Metals is currently generating about -0.08 per unit of risk. If you would invest 388.00 in MFF Capital Investments on August 25, 2024 and sell it today you would earn a total of 29.00 from holding MFF Capital Investments or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFF Capital Investments vs. Centaurus Metals
Performance |
| Timeline |
| MFF Capital Investments |
| Centaurus Metals |
MFF Capital and Centaurus Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and Centaurus Metals
The main advantage of trading using opposite MFF Capital and Centaurus Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital position performs unexpectedly, Centaurus Metals 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 Centaurus Metals will offset losses from the drop in Centaurus Metals' long position.| MFF Capital vs. Sandon Capital Investments | MFF Capital vs. Garda Diversified Ppty | MFF Capital vs. Stelar Metals | MFF Capital vs. A1 Investments Resources |
| Centaurus Metals vs. Northern Star Resources | Centaurus Metals vs. Evolution Mining | Centaurus Metals vs. Aneka Tambang Tbk | Centaurus Metals vs. De Grey 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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