Correlation Between Centaur Bci and Arrowhead Properties

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

Diversification Opportunities for Centaur Bci and Arrowhead Properties

0.0

Correlation Coefficient

Centaur Bci  Arrowhead Properties

Pay attention - limited upside

The 3 months correlation between Centaur and Arrowhead is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Bci Balanced and Arrowhead Properties Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrowhead Properties 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 Arrowhead Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrowhead Properties has no effect on the direction of Centaur Bci i.e., Centaur Bci and Arrowhead Properties go up and down completely randomly.

Pair Corralation between Centaur Bci and Arrowhead Properties

If you would invest  190.00  in Centaur Bci Balanced on October 7, 2024 and sell it today you would earn a total of  45.00  from holding Centaur Bci Balanced or generate 23.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.21%
Values	Daily Returns

Centaur Bci Balanced  vs.  Arrowhead Properties Ltd

Centaur Bci Balanced

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centaur Bci Balanced has generated negative risk-adjusted returns adding no value to fund investors. 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.

Arrowhead Properties

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Arrowhead Properties Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Arrowhead Properties is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Centaur Bci and Arrowhead Properties

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

The idea behind Centaur Bci Balanced and Arrowhead Properties Ltd 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.