Correlation Between Central Bank and Can Fin

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

By analyzing existing cross correlation between Central Bank of and Can Fin Homes, you can compare the effects of market volatilities on Central Bank and Can Fin 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 Central Bank with a short position of Can Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Bank and Can Fin.

Diversification Opportunities for Central Bank and Can Fin

0.91

Correlation Coefficient

Central Bank  Can Fin

Almost no diversification

The 3 months correlation between Central and Can is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Central Bank of and Can Fin Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Can Fin Homes and Central Bank 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 Central Bank of are associated (or correlated) with Can Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Can Fin Homes has no effect on the direction of Central Bank i.e., Central Bank and Can Fin go up and down completely randomly.

Pair Corralation between Central Bank and Can Fin

Assuming the 90 days trading horizon Central Bank of is expected to generate 1.71 times more return on investment than Can Fin. However, Central Bank is 1.71 times more volatile than Can Fin Homes. It trades about -0.08 of its potential returns per unit of risk. Can Fin Homes is currently generating about -0.28 per unit of risk. If you would invest  5,592  in Central Bank of on November 29, 2024 and sell it today you would lose (964.00) from holding Central Bank of or give up 17.24% of portfolio value over 90 days.

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

Central Bank of  vs.  Can Fin Homes

Central Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Central Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Can Fin Homes

Risk-Adjusted Performance

Very Weak

Over the last 90 days Can Fin Homes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Central Bank and Can Fin

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

The idea behind Central Bank of and Can Fin Homes 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.