Correlation Between Centaur Total and Portfolio

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

By analyzing existing cross correlation between Centaur Total Return and Portfolio 21 Global, you can compare the effects of market volatilities on Centaur Total and Portfolio 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 Centaur Total with a short position of Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaur Total and Portfolio.

Diversification Opportunities for Centaur Total and Portfolio

0.65

Correlation Coefficient

Centaur Total  Portfolio

Poor diversification

The 3 months correlation between Centaur and Portfolio is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Total Return and Portfolio 21 Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Portfolio 21 Global and Centaur Total 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 Centaur Total Return are associated (or correlated) with Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Portfolio 21 Global has no effect on the direction of Centaur Total i.e., Centaur Total and Portfolio go up and down completely randomly.

Pair Corralation between Centaur Total and Portfolio

If you would invest  599.00  in Centaur Total Return on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Centaur Total Return or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.0%
Values	Daily Returns

Centaur Total Return  vs.  Portfolio 21 Global

Centaur Total Return

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centaur Total Return has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Centaur Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Portfolio 21 Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Portfolio 21 Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Centaur Total and Portfolio

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

The idea behind Centaur Total Return and Portfolio 21 Global 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.