Correlation Between Centamin PLC and Phoenix Global

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

By analyzing existing cross correlation between Centamin PLC and Phoenix Global Mining, you can compare the effects of market volatilities on Centamin PLC and Phoenix Global 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 Centamin PLC with a short position of Phoenix Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centamin PLC and Phoenix Global.

Diversification Opportunities for Centamin PLC and Phoenix Global

-0.71

Correlation Coefficient

Centamin PLC  Phoenix Global

Pay attention - limited upside

The 3 months correlation between Centamin and Phoenix is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Centamin PLC and Phoenix Global Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Global Mining and Centamin PLC 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 Centamin PLC are associated (or correlated) with Phoenix Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Global Mining has no effect on the direction of Centamin PLC i.e., Centamin PLC and Phoenix Global go up and down completely randomly.

Pair Corralation between Centamin PLC and Phoenix Global

Assuming the 90 days trading horizon Centamin PLC is expected to generate 0.24 times more return on investment than Phoenix Global. However, Centamin PLC is 4.09 times less risky than Phoenix Global. It trades about -0.04 of its potential returns per unit of risk. Phoenix Global Mining is currently generating about -0.16 per unit of risk. If you would invest  15,400  in Centamin PLC on September 12, 2024 and sell it today you would lose (800.00) from holding Centamin PLC or give up 5.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	82.81%
Values	Daily Returns

Centamin PLC  vs.  Phoenix Global Mining

Centamin PLC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Phoenix Global Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phoenix Global Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Centamin PLC and Phoenix Global

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

The idea behind Centamin PLC and Phoenix Global Mining 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.