Correlation Between NewFunds GOVI and Centaur Bci

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

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

Diversification Opportunities for NewFunds GOVI and Centaur Bci

-0.22

Correlation Coefficient

NewFunds GOVI  Centaur Bci

Very good diversification

The 3 months correlation between NewFunds and Centaur is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NewFunds GOVI Exchange and Centaur Bci Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Bci Balanced and NewFunds GOVI 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 NewFunds GOVI Exchange are associated (or correlated) with Centaur Bci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Bci Balanced has no effect on the direction of NewFunds GOVI i.e., NewFunds GOVI and Centaur Bci go up and down completely randomly.

Pair Corralation between NewFunds GOVI and Centaur Bci

Assuming the 90 days trading horizon NewFunds GOVI Exchange is expected to under-perform the Centaur Bci. In addition to that, NewFunds GOVI is 1.43 times more volatile than Centaur Bci Balanced. It trades about -0.06 of its total potential returns per unit of risk. Centaur Bci Balanced is currently generating about 0.21 per unit of volatility. 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 Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

NewFunds GOVI Exchange  vs.  Centaur Bci Balanced

NewFunds GOVI Exchange

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with NewFunds GOVI and Centaur Bci

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

The idea behind NewFunds GOVI Exchange and Centaur Bci Balanced 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.