Correlation Between Tungsten West and Centaur Media

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

By analyzing existing cross correlation between Tungsten West PLC and Centaur Media, you can compare the effects of market volatilities on Tungsten West and Centaur Media 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 Tungsten West with a short position of Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tungsten West and Centaur Media.

Diversification Opportunities for Tungsten West and Centaur Media

-0.02

Correlation Coefficient

Tungsten West  Centaur Media

Good diversification

The 3 months correlation between Tungsten and Centaur is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Tungsten West PLC and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media and Tungsten West 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 Tungsten West PLC are associated (or correlated) with Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of Tungsten West i.e., Tungsten West and Centaur Media go up and down completely randomly.

Pair Corralation between Tungsten West and Centaur Media

Assuming the 90 days trading horizon Tungsten West PLC is expected to generate 2.7 times more return on investment than Centaur Media. However, Tungsten West is 2.7 times more volatile than Centaur Media. It trades about 0.03 of its potential returns per unit of risk. Centaur Media is currently generating about -0.17 per unit of risk. If you would invest  325.00  in Tungsten West PLC on September 13, 2024 and sell it today you would lose (12.00) from holding Tungsten West PLC or give up 3.69% of portfolio value over 90 days.

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

Tungsten West PLC  vs.  Centaur Media

Tungsten West PLC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tungsten West PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Tungsten West exhibited solid returns over the last few months and may actually be approaching a breakup point.

Centaur Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centaur Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Tungsten West and Centaur Media

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

The idea behind Tungsten West PLC and Centaur Media 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.