Correlation Between Centaurus Metals and ANZ Group

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Can any of the company-specific risk be diversified away by investing in both Centaurus Metals and ANZ Group 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 Centaurus Metals and ANZ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaurus Metals and ANZ Group Holdings, you can compare the effects of market volatilities on Centaurus Metals and ANZ Group 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 Centaurus Metals with a short position of ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaurus Metals and ANZ Group.

Diversification Opportunities for Centaurus Metals and ANZ Group

-0.14
  Correlation Coefficient

Good diversification

The 3 months correlation between Centaurus and ANZ is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings and Centaurus Metals 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 Centaurus Metals are associated (or correlated) with ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Centaurus Metals i.e., Centaurus Metals and ANZ Group go up and down completely randomly.

Pair Corralation between Centaurus Metals and ANZ Group

Assuming the 90 days trading horizon Centaurus Metals is expected to generate 21.14 times more return on investment than ANZ Group. However, Centaurus Metals is 21.14 times more volatile than ANZ Group Holdings. It trades about 0.01 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about 0.13 per unit of risk. If you would invest  47.00  in Centaurus Metals on October 8, 2024 and sell it today you would lose (10.00) from holding Centaurus Metals or give up 21.28% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Centaurus Metals  vs.  ANZ Group Holdings

 Performance 
       Timeline  
Centaurus Metals 

Risk-Adjusted Performance

0 of 100

 
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Strong
Very Weak
Over the last 90 days Centaurus Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
ANZ Group Holdings 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in ANZ Group Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ANZ Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Centaurus Metals and ANZ Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Centaurus Metals and ANZ Group

The main advantage of trading using opposite Centaurus Metals and ANZ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaurus Metals position performs unexpectedly, ANZ Group 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 ANZ Group will offset losses from the drop in ANZ Group's long position.
The idea behind Centaurus Metals and ANZ Group Holdings 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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