Correlation Between Satrix Indi and Centaur Bci

Can any of the company-specific risk be diversified away by investing in both Satrix Indi and Centaur Bci 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 Satrix Indi and Centaur Bci into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Satrix Indi ETF and Centaur Bci Balanced, you can compare the effects of market volatilities on Satrix Indi and Centaur Bci 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 Satrix Indi with a short position of Centaur Bci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satrix Indi and Centaur Bci.

Diversification Opportunities for Satrix Indi and Centaur Bci

0.86

Correlation Coefficient

Satrix Indi  Centaur Bci

Very poor diversification

The 3 months correlation between Satrix and Centaur is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Satrix Indi ETF and Centaur Bci Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Bci Balanced and Satrix Indi 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 Satrix Indi ETF are associated (or correlated) with Centaur Bci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Bci Balanced has no effect on the direction of Satrix Indi i.e., Satrix Indi and Centaur Bci go up and down completely randomly.

Pair Corralation between Satrix Indi and Centaur Bci

Assuming the 90 days trading horizon Satrix Indi ETF is expected to generate 1.8 times more return on investment than Centaur Bci. However, Satrix Indi is 1.8 times more volatile than Centaur Bci Balanced. It trades about 0.2 of its potential returns per unit of risk. Centaur Bci Balanced is currently generating about 0.21 per unit of risk. If you would invest  1,092,215  in Satrix Indi ETF on September 15, 2024 and sell it today you would earn a total of  116,385  from holding Satrix Indi ETF or generate 10.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.38%
Values	Daily Returns

Satrix Indi ETF  vs.  Centaur Bci Balanced

Satrix Indi ETF

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Satrix Indi ETF are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Satrix Indi may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Centaur Bci Balanced

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Centaur Bci Balanced are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Centaur Bci is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Satrix Indi and Centaur Bci

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

The idea behind Satrix Indi ETF and Centaur Bci Balanced 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.