Correlation Between Centaur Bci and Coronation Capital

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

Diversification Opportunities for Centaur Bci and Coronation Capital

0.87

Correlation Coefficient

Centaur Bci  Coronation Capital

Very poor diversification

The 3 months correlation between Centaur and Coronation is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Bci Balanced and Coronation Capital Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coronation Capital Plus 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 Coronation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coronation Capital Plus has no effect on the direction of Centaur Bci i.e., Centaur Bci and Coronation Capital go up and down completely randomly.

Pair Corralation between Centaur Bci and Coronation Capital

Assuming the 90 days trading horizon Centaur Bci is expected to generate 1.06 times less return on investment than Coronation Capital. But when comparing it to its historical volatility, Centaur Bci Balanced is 1.0 times less risky than Coronation Capital. It trades about 0.21 of its potential returns per unit of risk. Coronation Capital Plus is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  5,421  in Coronation Capital Plus on September 16, 2024 and sell it today you would earn a total of  349.00  from holding Coronation Capital Plus or generate 6.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Centaur Bci Balanced  vs.  Coronation Capital Plus

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.

Coronation Capital Plus

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Coronation Capital Plus are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong basic indicators, Coronation Capital is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Centaur Bci and Coronation Capital

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

The idea behind Centaur Bci Balanced and Coronation Capital Plus 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.