Correlation Between SERI INDUSTRIAL and CENTRICA ADR
Can any of the company-specific risk be diversified away by investing in both SERI INDUSTRIAL and CENTRICA ADR 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 SERI INDUSTRIAL and CENTRICA ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SERI INDUSTRIAL EO and CENTRICA ADR NEW, you can compare the effects of market volatilities on SERI INDUSTRIAL and CENTRICA ADR 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 SERI INDUSTRIAL with a short position of CENTRICA ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERI INDUSTRIAL and CENTRICA ADR.
Diversification Opportunities for SERI INDUSTRIAL and CENTRICA ADR
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SERI and CENTRICA is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO and CENTRICA ADR NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTRICA ADR NEW and SERI INDUSTRIAL 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 SERI INDUSTRIAL EO are associated (or correlated) with CENTRICA ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTRICA ADR NEW has no effect on the direction of SERI INDUSTRIAL i.e., SERI INDUSTRIAL and CENTRICA ADR go up and down completely randomly.
Pair Corralation between SERI INDUSTRIAL and CENTRICA ADR
Assuming the 90 days trading horizon SERI INDUSTRIAL EO is expected to under-perform the CENTRICA ADR. In addition to that, SERI INDUSTRIAL is 4.26 times more volatile than CENTRICA ADR NEW. It trades about 0.0 of its total potential returns per unit of risk. CENTRICA ADR NEW is currently generating about 0.45 per unit of volatility. If you would invest 535.00 in CENTRICA ADR NEW on September 12, 2024 and sell it today you would earn a total of 75.00 from holding CENTRICA ADR NEW or generate 14.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SERI INDUSTRIAL EO vs. CENTRICA ADR NEW
Performance |
| Timeline |
| SERI INDUSTRIAL EO |
| CENTRICA ADR NEW |
SERI INDUSTRIAL and CENTRICA ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SERI INDUSTRIAL and CENTRICA ADR
The main advantage of trading using opposite SERI INDUSTRIAL and CENTRICA ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERI INDUSTRIAL position performs unexpectedly, CENTRICA ADR 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 CENTRICA ADR will offset losses from the drop in CENTRICA ADR's long position.| SERI INDUSTRIAL vs. Ameriprise Financial | SERI INDUSTRIAL vs. Gamma Communications plc | SERI INDUSTRIAL vs. IMPERIAL TOBACCO | SERI INDUSTRIAL vs. Cogent Communications Holdings |
| CENTRICA ADR vs. Westinghouse Air Brake | CENTRICA ADR vs. HomeToGo SE | CENTRICA ADR vs. LANDSEA HOMES P | CENTRICA ADR vs. Corsair Gaming |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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