Correlation Between Centaurus Metals and De Grey

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

By analyzing existing cross correlation between Centaurus Metals and De Grey Mining, you can compare the effects of market volatilities on Centaurus Metals and De Grey 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 Centaurus Metals with a short position of De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaurus Metals and De Grey.

Diversification Opportunities for Centaurus Metals and De Grey

-0.53

Correlation Coefficient

Centaurus Metals  De Grey

Excellent diversification

The 3 months correlation between Centaurus and DEG is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals and De Grey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Grey Mining and Centaurus Metals 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 Centaurus Metals are associated (or correlated) with De Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Grey Mining has no effect on the direction of Centaurus Metals i.e., Centaurus Metals and De Grey go up and down completely randomly.

Pair Corralation between Centaurus Metals and De Grey

Assuming the 90 days trading horizon Centaurus Metals is expected to under-perform the De Grey. In addition to that, Centaurus Metals is 1.05 times more volatile than De Grey Mining. It trades about -0.01 of its total potential returns per unit of risk. De Grey Mining is currently generating about 0.15 per unit of volatility. If you would invest  130.00  in De Grey Mining on September 19, 2024 and sell it today you would earn a total of  55.00  from holding De Grey Mining or generate 42.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Centaurus Metals  vs.  De Grey Mining

Centaurus Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centaurus Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Centaurus Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

De Grey Mining

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in De Grey Mining are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, De Grey unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Centaurus Metals and De Grey

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

The idea behind Centaurus Metals and De Grey Mining 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.