Correlation Between Centaur Media and London Security
Can any of the company-specific risk be diversified away by investing in both Centaur Media and London Security 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 Media and London Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaur Media and London Security Plc, you can compare the effects of market volatilities on Centaur Media and London Security 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 Media with a short position of London Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaur Media and London Security.
Diversification Opportunities for Centaur Media and London Security
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Centaur and London is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Media and London Security Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on London Security Plc and Centaur Media 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 Media are associated (or correlated) with London Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of London Security Plc has no effect on the direction of Centaur Media i.e., Centaur Media and London Security go up and down completely randomly.
Pair Corralation between Centaur Media and London Security
Assuming the 90 days trading horizon Centaur Media is expected to generate 89.54 times less return on investment than London Security. But when comparing it to its historical volatility, Centaur Media is 83.85 times less risky than London Security. It trades about 0.18 of its potential returns per unit of risk. London Security Plc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 339,162 in London Security Plc on August 27, 2025 and sell it today you would lose (54,162) from holding London Security Plc or give up 15.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centaur Media vs. London Security Plc
Performance |
| Timeline |
| Centaur Media |
| London Security Plc |
Centaur Media and London Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaur Media and London Security
The main advantage of trading using opposite Centaur Media and London Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaur Media position performs unexpectedly, London Security 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 London Security will offset losses from the drop in London Security's long position.| Centaur Media vs. Gaztransport et Technigaz | Centaur Media vs. Roadside Real Estate | Centaur Media vs. Resolute Mining Limited | Centaur Media vs. AMG Advanced Metallurgical |
| London Security vs. Games Workshop Group | London Security vs. Pentair PLC | London Security vs. Westlake Chemical Corp | London Security vs. Norwegian Air Shuttle |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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