Correlation Between Pace International and Centre Global
Can any of the company-specific risk be diversified away by investing in both Pace International and Centre Global 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 Pace International and Centre Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace International Emerging and Centre Global Infrastructure, you can compare the effects of market volatilities on Pace International and Centre Global 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 Pace International with a short position of Centre Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace International and Centre Global.
Diversification Opportunities for Pace International and Centre Global
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pace and Centre is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Emerging and Centre Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centre Global Infras and Pace International 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 Pace International Emerging are associated (or correlated) with Centre Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centre Global Infras has no effect on the direction of Pace International i.e., Pace International and Centre Global go up and down completely randomly.
Pair Corralation between Pace International and Centre Global
Assuming the 90 days horizon Pace International is expected to generate 2.74 times less return on investment than Centre Global. In addition to that, Pace International is 1.31 times more volatile than Centre Global Infrastructure. It trades about 0.03 of its total potential returns per unit of risk. Centre Global Infrastructure is currently generating about 0.11 per unit of volatility. If you would invest 950.00 in Centre Global Infrastructure on September 12, 2024 and sell it today you would earn a total of 271.00 from holding Centre Global Infrastructure or generate 28.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace International Emerging vs. Centre Global Infrastructure
Performance |
| Timeline |
| Pace International |
| Centre Global Infras |
Pace International and Centre Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace International and Centre Global
The main advantage of trading using opposite Pace International and Centre Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace International position performs unexpectedly, Centre Global 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 Centre Global will offset losses from the drop in Centre Global's long position.| Pace International vs. Prudential Jennison Financial | Pace International vs. Davis Financial Fund | Pace International vs. Financials Ultrasector Profund | Pace International vs. Mesirow Financial Small |
| Centre Global vs. Vy Jpmorgan Emerging | Centre Global vs. Artisan Emerging Markets | Centre Global vs. Pace International Emerging | Centre Global vs. Black Oak Emerging |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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