Correlation Between Centrotec and TRAVIS PERKINS
Can any of the company-specific risk be diversified away by investing in both Centrotec and TRAVIS PERKINS 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 Centrotec and TRAVIS PERKINS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrotec SE and TRAVIS PERKINS LS 1, you can compare the effects of market volatilities on Centrotec and TRAVIS PERKINS 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 Centrotec with a short position of TRAVIS PERKINS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrotec and TRAVIS PERKINS.
Diversification Opportunities for Centrotec and TRAVIS PERKINS
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centrotec and TRAVIS is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Centrotec SE and TRAVIS PERKINS LS 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVIS PERKINS LS and Centrotec 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 Centrotec SE are associated (or correlated) with TRAVIS PERKINS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVIS PERKINS LS has no effect on the direction of Centrotec i.e., Centrotec and TRAVIS PERKINS go up and down completely randomly.
Pair Corralation between Centrotec and TRAVIS PERKINS
Assuming the 90 days trading horizon Centrotec SE is expected to generate 0.75 times more return on investment than TRAVIS PERKINS. However, Centrotec SE is 1.34 times less risky than TRAVIS PERKINS. It trades about 0.0 of its potential returns per unit of risk. TRAVIS PERKINS LS 1 is currently generating about -0.01 per unit of risk. If you would invest 5,372 in Centrotec SE on September 26, 2024 and sell it today you would lose (72.00) from holding Centrotec SE or give up 1.34% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Centrotec SE vs. TRAVIS PERKINS LS 1
Performance |
Timeline |
Centrotec SE |
TRAVIS PERKINS LS |
Centrotec and TRAVIS PERKINS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Centrotec and TRAVIS PERKINS
The main advantage of trading using opposite Centrotec and TRAVIS PERKINS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrotec position performs unexpectedly, TRAVIS PERKINS 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 TRAVIS PERKINS will offset losses from the drop in TRAVIS PERKINS's long position.Centrotec vs. DAIKIN INDUSTRUNSPADR | Centrotec vs. Carrier Global | Centrotec vs. Geberit AG | Centrotec vs. FLAT GLASS GROUP |
TRAVIS PERKINS vs. DAIKIN INDUSTRUNSPADR | TRAVIS PERKINS vs. Carrier Global | TRAVIS PERKINS vs. Geberit AG | TRAVIS PERKINS vs. FLAT GLASS GROUP |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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