Correlation Between Centaur Bci and NewFunds TRACI

Can any of the company-specific risk be diversified away by investing in both Centaur Bci and NewFunds TRACI 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 NewFunds TRACI 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 NewFunds TRACI 3, you can compare the effects of market volatilities on Centaur Bci and NewFunds TRACI 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 NewFunds TRACI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaur Bci and NewFunds TRACI.

Diversification Opportunities for Centaur Bci and NewFunds TRACI

0.52

Correlation Coefficient

Centaur Bci  NewFunds TRACI

Very weak diversification

The 3 months correlation between Centaur and NewFunds is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Bci Balanced and NewFunds TRACI 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFunds TRACI 3 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 NewFunds TRACI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFunds TRACI 3 has no effect on the direction of Centaur Bci i.e., Centaur Bci and NewFunds TRACI go up and down completely randomly.

Pair Corralation between Centaur Bci and NewFunds TRACI

Assuming the 90 days trading horizon Centaur Bci Balanced is expected to generate 1.24 times more return on investment than NewFunds TRACI. However, Centaur Bci is 1.24 times more volatile than NewFunds TRACI 3. It trades about 0.21 of its potential returns per unit of risk. NewFunds TRACI 3 is currently generating about 0.09 per unit of risk. If you would invest  232.00  in Centaur Bci Balanced on September 15, 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	96.88%
Values	Daily Returns

Centaur Bci Balanced  vs.  NewFunds TRACI 3

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.

NewFunds TRACI 3

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NewFunds TRACI 3 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, NewFunds TRACI is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Centaur Bci and NewFunds TRACI

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

The idea behind Centaur Bci Balanced and NewFunds TRACI 3 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.