Correlation Between Central Puerto and Stratis

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Can any of the company-specific risk be diversified away by investing in both Central Puerto and Stratis 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 Central Puerto and Stratis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Puerto and Stratis, you can compare the effects of market volatilities on Central Puerto and Stratis 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 Central Puerto with a short position of Stratis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Puerto and Stratis.

Diversification Opportunities for Central Puerto and Stratis

-0.19
  Correlation Coefficient

Good diversification

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

Pair Corralation between Central Puerto and Stratis

Given the investment horizon of 90 days Central Puerto is expected to generate 0.48 times more return on investment than Stratis. However, Central Puerto is 2.07 times less risky than Stratis. It trades about 0.08 of its potential returns per unit of risk. Stratis is currently generating about -0.03 per unit of risk. If you would invest  270.00  in Central Puerto on September 5, 2022 and sell it today you would earn a total of  270.00  from holding Central Puerto or generate 100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy94.55%
ValuesDaily Returns

Central Puerto  vs.  Stratis

 Performance (%) 
       Timeline  
Central Puerto 
Central Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Central Puerto are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Central Puerto unveiled solid returns over the last few months and may actually be approaching a breakup point.

Central Price Channel

Stratis 
Stratis Performance
0 of 100
Over the last 90 days Stratis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Stratis is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Stratis Price Channel

Central Puerto and Stratis Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Central Puerto and Stratis

The main advantage of trading using opposite Central Puerto and Stratis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Puerto position performs unexpectedly, Stratis 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 Stratis will offset losses from the drop in Stratis' long position.
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The idea behind Central Puerto and Stratis 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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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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