Correlation Between Camellia Plc and Centrica PLC
Can any of the company-specific risk be diversified away by investing in both Camellia Plc and Centrica PLC 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 Camellia Plc and Centrica PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camellia Plc and Centrica PLC, you can compare the effects of market volatilities on Camellia Plc and Centrica PLC 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 Camellia Plc with a short position of Centrica PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camellia Plc and Centrica PLC.
Diversification Opportunities for Camellia Plc and Centrica PLC
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Camellia and Centrica is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Camellia Plc and Centrica PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrica PLC and Camellia Plc 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 Camellia Plc are associated (or correlated) with Centrica PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrica PLC has no effect on the direction of Camellia Plc i.e., Camellia Plc and Centrica PLC go up and down completely randomly.
Pair Corralation between Camellia Plc and Centrica PLC
Assuming the 90 days trading horizon Camellia Plc is expected to generate 69.98 times less return on investment than Centrica PLC. But when comparing it to its historical volatility, Camellia Plc is 56.59 times less risky than Centrica PLC. It trades about 0.06 of its potential returns per unit of risk. Centrica PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 13,463 in Centrica PLC on September 25, 2024 and sell it today you would lose (713.00) from holding Centrica PLC or give up 5.3% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Camellia Plc vs. Centrica PLC
Performance |
Timeline |
Camellia Plc |
Centrica PLC |
Camellia Plc and Centrica PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Camellia Plc and Centrica PLC
The main advantage of trading using opposite Camellia Plc and Centrica PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camellia Plc position performs unexpectedly, Centrica PLC 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 PLC will offset losses from the drop in Centrica PLC's long position.Camellia Plc vs. Uniper SE | Camellia Plc vs. Mulberry Group PLC | Camellia Plc vs. London Security Plc | Camellia Plc vs. Triad Group PLC |
Centrica PLC vs. National Atomic Co | Centrica PLC vs. Flutter Entertainment PLC | Centrica PLC vs. Camellia Plc | Centrica PLC vs. Marwyn Value Investors |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |