Correlation Between Novavis Group and Centrum Finansowe
Can any of the company-specific risk be diversified away by investing in both Novavis Group and Centrum Finansowe 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 Novavis Group and Centrum Finansowe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novavis Group SA and Centrum Finansowe Banku, you can compare the effects of market volatilities on Novavis Group and Centrum Finansowe 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 Novavis Group with a short position of Centrum Finansowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novavis Group and Centrum Finansowe.
Diversification Opportunities for Novavis Group and Centrum Finansowe
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Novavis and Centrum is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Novavis Group SA and Centrum Finansowe Banku in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrum Finansowe Banku and Novavis Group 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 Novavis Group SA are associated (or correlated) with Centrum Finansowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrum Finansowe Banku has no effect on the direction of Novavis Group i.e., Novavis Group and Centrum Finansowe go up and down completely randomly.
Pair Corralation between Novavis Group and Centrum Finansowe
Assuming the 90 days trading horizon Novavis Group SA is expected to generate 0.68 times more return on investment than Centrum Finansowe. However, Novavis Group SA is 1.46 times less risky than Centrum Finansowe. It trades about 0.23 of its potential returns per unit of risk. Centrum Finansowe Banku is currently generating about -0.02 per unit of risk. If you would invest 129.00 in Novavis Group SA on November 28, 2024 and sell it today you would earn a total of 12.00 from holding Novavis Group SA or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Novavis Group SA vs. Centrum Finansowe Banku
Performance |
| Timeline |
| Novavis Group SA |
| Centrum Finansowe Banku |
Novavis Group and Centrum Finansowe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novavis Group and Centrum Finansowe
The main advantage of trading using opposite Novavis Group and Centrum Finansowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novavis Group position performs unexpectedly, Centrum Finansowe 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 Centrum Finansowe will offset losses from the drop in Centrum Finansowe's long position.| Novavis Group vs. Globe Trade Centre | Novavis Group vs. CI Games SA | Novavis Group vs. Santander Bank Polska | Novavis Group vs. Varsav Game Studios |
| Centrum Finansowe vs. Fintech SA | Centrum Finansowe vs. MW Trade SA | Centrum Finansowe vs. Marie Brizard Wine | Centrum Finansowe vs. Monnari Trade SA |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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