Correlation Between Centrum Finansowe and Altustfi

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

By analyzing existing cross correlation between Centrum Finansowe Banku and Altustfi, you can compare the effects of market volatilities on Centrum Finansowe and Altustfi 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 Centrum Finansowe with a short position of Altustfi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrum Finansowe and Altustfi.

Diversification Opportunities for Centrum Finansowe and Altustfi

-0.8

Correlation Coefficient

Centrum Finansowe  Altustfi

Pay attention - limited upside

The 3 months correlation between Centrum and Altustfi is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Centrum Finansowe Banku and Altustfi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altustfi and Centrum Finansowe 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 Centrum Finansowe Banku are associated (or correlated) with Altustfi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altustfi has no effect on the direction of Centrum Finansowe i.e., Centrum Finansowe and Altustfi go up and down completely randomly.

Pair Corralation between Centrum Finansowe and Altustfi

Assuming the 90 days trading horizon Centrum Finansowe Banku is expected to generate 0.89 times more return on investment than Altustfi. However, Centrum Finansowe Banku is 1.12 times less risky than Altustfi. It trades about 0.11 of its potential returns per unit of risk. Altustfi is currently generating about -0.16 per unit of risk. If you would invest  505.00  in Centrum Finansowe Banku on September 12, 2024 and sell it today you would earn a total of  80.00  from holding Centrum Finansowe Banku or generate 15.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Centrum Finansowe Banku  vs.  Altustfi

Centrum Finansowe Banku

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Centrum Finansowe Banku are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Centrum Finansowe reported solid returns over the last few months and may actually be approaching a breakup point.

Altustfi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altustfi has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Centrum Finansowe and Altustfi

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

The idea behind Centrum Finansowe Banku and Altustfi 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.