Correlation Between Southern Hemisphere and Centaurus Metals
Can any of the company-specific risk be diversified away by investing in both Southern Hemisphere 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 Southern Hemisphere and Centaurus Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Hemisphere Mining and Centaurus Metals, you can compare the effects of market volatilities on Southern Hemisphere 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 Southern Hemisphere with a short position of Centaurus Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Hemisphere and Centaurus Metals.
Diversification Opportunities for Southern Hemisphere and Centaurus Metals
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Southern and Centaurus is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Southern Hemisphere Mining and Centaurus Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaurus Metals and Southern Hemisphere 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 Southern Hemisphere Mining 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 Southern Hemisphere i.e., Southern Hemisphere and Centaurus Metals go up and down completely randomly.
Pair Corralation between Southern Hemisphere and Centaurus Metals
Assuming the 90 days trading horizon Southern Hemisphere is expected to generate 1.36 times less return on investment than Centaurus Metals. In addition to that, Southern Hemisphere is 1.41 times more volatile than Centaurus Metals. It trades about 0.09 of its total potential returns per unit of risk. Centaurus Metals is currently generating about 0.18 per unit of volatility. If you would invest 34.00 in Centaurus Metals on November 8, 2024 and sell it today you would earn a total of 6.00 from holding Centaurus Metals or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Hemisphere Mining vs. Centaurus Metals
Performance |
| Timeline |
| Southern Hemisphere |
| Centaurus Metals |
Southern Hemisphere and Centaurus Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Hemisphere and Centaurus Metals
The main advantage of trading using opposite Southern Hemisphere and Centaurus Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Hemisphere 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.| Southern Hemisphere vs. Argo Investments | Southern Hemisphere vs. Navigator Global Investments | Southern Hemisphere vs. Hudson Investment Group | Southern Hemisphere vs. Hutchison Telecommunications |
| Centaurus Metals vs. TPG Telecom | Centaurus Metals vs. Charter Hall Education | Centaurus Metals vs. Truscott Mining Corp | Centaurus Metals vs. MetalsGrove 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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