Correlation Between Century Petroleum and Cgrowth Capital

Can any of the company-specific risk be diversified away by investing in both Century Petroleum and Cgrowth Capital 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 Century Petroleum and Cgrowth Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Century Petroleum Corp and Cgrowth Capital, you can compare the effects of market volatilities on Century Petroleum and Cgrowth Capital 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 Century Petroleum with a short position of Cgrowth Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Petroleum and Cgrowth Capital.

Diversification Opportunities for Century Petroleum and Cgrowth Capital

0.0

Correlation Coefficient

Century Petroleum  Cgrowth Capital

Pay attention - limited upside

The 3 months correlation between Century and Cgrowth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Century Petroleum Corp and Cgrowth Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cgrowth Capital and Century Petroleum 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 Century Petroleum Corp are associated (or correlated) with Cgrowth Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cgrowth Capital has no effect on the direction of Century Petroleum i.e., Century Petroleum and Cgrowth Capital go up and down completely randomly.

Pair Corralation between Century Petroleum and Cgrowth Capital

Given the investment horizon of 90 days Century Petroleum Corp is expected to generate 10.72 times more return on investment than Cgrowth Capital. However, Century Petroleum is 10.72 times more volatile than Cgrowth Capital. It trades about 0.22 of its potential returns per unit of risk. Cgrowth Capital is currently generating about 0.2 per unit of risk. If you would invest  0.00  in Century Petroleum Corp on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Century Petroleum Corp or generate 9.223372036854776E16% return on investment over 90 days.

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

Century Petroleum Corp  vs.  Cgrowth Capital

Century Petroleum Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Century Petroleum Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Century Petroleum exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cgrowth Capital

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cgrowth Capital are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Cgrowth Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Century Petroleum and Cgrowth Capital

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

The idea behind Century Petroleum Corp and Cgrowth Capital 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.