Correlation Between Centaurus Metals and Hutchison Telecommunicatio

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

By analyzing existing cross correlation between Centaurus Metals and Hutchison Telecommunications, you can compare the effects of market volatilities on Centaurus Metals and Hutchison Telecommunicatio 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 Hutchison Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaurus Metals and Hutchison Telecommunicatio.

Diversification Opportunities for Centaurus Metals and Hutchison Telecommunicatio

0.08

Correlation Coefficient

Centaurus Metals  Hutchison Telecommunicatio

Significant diversification

The 3 months correlation between Centaurus and Hutchison is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals and Hutchison Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hutchison Telecommunicatio 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 Hutchison Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hutchison Telecommunicatio has no effect on the direction of Centaurus Metals i.e., Centaurus Metals and Hutchison Telecommunicatio go up and down completely randomly.

Pair Corralation between Centaurus Metals and Hutchison Telecommunicatio

Assuming the 90 days trading horizon Centaurus Metals is expected to under-perform the Hutchison Telecommunicatio. In addition to that, Centaurus Metals is 1.9 times more volatile than Hutchison Telecommunications. It trades about -0.17 of its total potential returns per unit of risk. Hutchison Telecommunications is currently generating about 0.19 per unit of volatility. If you would invest  2.50  in Hutchison Telecommunications on October 4, 2024 and sell it today you would earn a total of  0.20  from holding Hutchison Telecommunications or generate 8.0% return on investment over 90 days.

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

Centaurus Metals  vs.  Hutchison Telecommunications

Centaurus Metals

Risk-Adjusted Performance

0 of 100

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 uncertain 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.

Hutchison Telecommunicatio

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hutchison Telecommunications are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Hutchison Telecommunicatio is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Centaurus Metals and Hutchison Telecommunicatio

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

The idea behind Centaurus Metals and Hutchison Telecommunications 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.