Correlation Between Centaur Bci and CoreShares

Can any of the company-specific risk be diversified away by investing in both Centaur Bci and CoreShares 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 Centaur Bci and CoreShares into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Centaur Bci Balanced and CoreShares SP Global, you can compare the effects of market volatilities on Centaur Bci and CoreShares 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 Centaur Bci with a short position of CoreShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaur Bci and CoreShares.

Diversification Opportunities for Centaur Bci and CoreShares

0.4

Correlation Coefficient

Centaur Bci  CoreShares

Very weak diversification

The 3 months correlation between Centaur and CoreShares is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Bci Balanced and CoreShares SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreShares SP Global and Centaur Bci 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 Centaur Bci Balanced are associated (or correlated) with CoreShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoreShares SP Global has no effect on the direction of Centaur Bci i.e., Centaur Bci and CoreShares go up and down completely randomly.

Pair Corralation between Centaur Bci and CoreShares

Assuming the 90 days trading horizon Centaur Bci Balanced is expected to generate 0.56 times more return on investment than CoreShares. However, Centaur Bci Balanced is 1.8 times less risky than CoreShares. It trades about 0.21 of its potential returns per unit of risk. CoreShares SP Global is currently generating about 0.0 per unit of risk. If you would invest  232.00  in Centaur Bci Balanced on September 16, 2024 and sell it today you would earn a total of  14.00  from holding Centaur Bci Balanced or generate 6.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

Centaur Bci Balanced  vs.  CoreShares SP Global

Centaur Bci Balanced

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Centaur Bci Balanced are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Centaur Bci is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CoreShares SP Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CoreShares SP Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, CoreShares is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Centaur Bci and CoreShares

The main advantage of trading using opposite Centaur Bci and CoreShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaur Bci position performs unexpectedly, CoreShares 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 CoreShares will offset losses from the drop in CoreShares' long position.

The idea behind Centaur Bci Balanced and CoreShares SP Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.