Correlation Between Centrum Finansowe and Enter Air

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

By analyzing existing cross correlation between Centrum Finansowe Banku and Enter Air SA, you can compare the effects of market volatilities on Centrum Finansowe and Enter Air 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 Centrum Finansowe with a short position of Enter Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrum Finansowe and Enter Air.

Diversification Opportunities for Centrum Finansowe and Enter Air

0.37

Correlation Coefficient

Centrum Finansowe  Enter Air

Weak diversification

The 3 months correlation between Centrum and Enter is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Centrum Finansowe Banku and Enter Air SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enter Air SA and Centrum Finansowe 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 Centrum Finansowe Banku are associated (or correlated) with Enter Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enter Air SA has no effect on the direction of Centrum Finansowe i.e., Centrum Finansowe and Enter Air go up and down completely randomly.

Pair Corralation between Centrum Finansowe and Enter Air

Assuming the 90 days trading horizon Centrum Finansowe is expected to generate 1.29 times less return on investment than Enter Air. In addition to that, Centrum Finansowe is 1.05 times more volatile than Enter Air SA. It trades about 0.05 of its total potential returns per unit of risk. Enter Air SA is currently generating about 0.07 per unit of volatility. If you would invest  2,960  in Enter Air SA on October 27, 2024 and sell it today you would earn a total of  2,500  from holding Enter Air SA or generate 84.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Centrum Finansowe Banku  vs.  Enter Air SA

Centrum Finansowe Banku

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centrum Finansowe Banku has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Centrum Finansowe is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Enter Air SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enter Air SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Centrum Finansowe and Enter Air

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

The idea behind Centrum Finansowe Banku and Enter Air SA 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.