Correlation Between Centaurus Metals and FOS Capital

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

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

Diversification Opportunities for Centaurus Metals and FOS Capital

-0.19

Correlation Coefficient

Centaurus Metals  FOS Capital

Good diversification

The 3 months correlation between Centaurus and FOS is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals and FOS Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOS Capital 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 FOS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOS Capital has no effect on the direction of Centaurus Metals i.e., Centaurus Metals and FOS Capital go up and down completely randomly.

Pair Corralation between Centaurus Metals and FOS Capital

Assuming the 90 days trading horizon Centaurus Metals is expected to under-perform the FOS Capital. In addition to that, Centaurus Metals is 1.08 times more volatile than FOS Capital. It trades about -0.03 of its total potential returns per unit of risk. FOS Capital is currently generating about 0.03 per unit of volatility. If you would invest  31.00  in FOS Capital on April 21, 2025 and sell it today you would earn a total of  1.00  from holding FOS Capital or generate 3.23% return on investment over 90 days.

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

Centaurus Metals  vs.  FOS Capital

Centaurus Metals

Risk-Adjusted Performance

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 latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

FOS Capital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FOS Capital are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, FOS Capital may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Centaurus Metals and FOS Capital

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

The idea behind Centaurus Metals and FOS 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.