Correlation Between Centaur Bci and Oceana

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

Diversification Opportunities for Centaur Bci and Oceana

0.64

Correlation Coefficient

Centaur Bci  Oceana

Poor diversification

The 3 months correlation between Centaur and Oceana is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Bci Balanced and Oceana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceana 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 Oceana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceana has no effect on the direction of Centaur Bci i.e., Centaur Bci and Oceana go up and down completely randomly.

Pair Corralation between Centaur Bci and Oceana

Assuming the 90 days trading horizon Centaur Bci Balanced is expected to generate 0.45 times more return on investment than Oceana. However, Centaur Bci Balanced is 2.23 times less risky than Oceana. It trades about 0.23 of its potential returns per unit of risk. Oceana is currently generating about 0.06 per unit of risk. If you would invest  229.00  in Centaur Bci Balanced on September 12, 2024 and sell it today you would earn a total of  15.00  from holding Centaur Bci Balanced or generate 6.55% return on investment over 90 days.

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

Centaur Bci Balanced  vs.  Oceana

Centaur Bci Balanced

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Centaur Bci Balanced are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Centaur Bci may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Oceana

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oceana are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Oceana is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Centaur Bci and Oceana

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

The idea behind Centaur Bci Balanced and Oceana 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.