Correlation Between South Star and Centaurus Metals
Can any of the company-specific risk be diversified away by investing in both South Star 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 South Star and Centaurus Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Star Battery and Centaurus Metals Limited, you can compare the effects of market volatilities on South Star 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 South Star with a short position of Centaurus Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Star and Centaurus Metals.
Diversification Opportunities for South Star and Centaurus Metals
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between South and Centaurus is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding South Star Battery and Centaurus Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaurus Metals and South Star 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 South Star Battery 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 South Star i.e., South Star and Centaurus Metals go up and down completely randomly.
Pair Corralation between South Star and Centaurus Metals
Assuming the 90 days horizon South Star Battery is expected to generate 0.98 times more return on investment than Centaurus Metals. However, South Star Battery is 1.02 times less risky than Centaurus Metals. It trades about -0.08 of its potential returns per unit of risk. Centaurus Metals Limited is currently generating about -0.09 per unit of risk. If you would invest 44.00 in South Star Battery on August 29, 2024 and sell it today you would lose (5.00) from holding South Star Battery or give up 11.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
South Star Battery vs. Centaurus Metals Limited
Performance |
| Timeline |
| South Star Battery |
| Centaurus Metals |
South Star and Centaurus Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Star and Centaurus Metals
The main advantage of trading using opposite South Star and Centaurus Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Star 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.| South Star vs. ZincX Resources Corp | South Star vs. Nuinsco Resources Limited | South Star vs. Qubec Nickel Corp | South Star vs. Rockridge Resources |
| Centaurus Metals vs. Rockridge Resources | Centaurus Metals vs. Vital Metals Limited | Centaurus Metals vs. Ameriwest Lithium | Centaurus Metals vs. Osisko Metals Incorporated |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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