Correlation Between Tradeweb Markets and CIFI Holdings
Can any of the company-specific risk be diversified away by investing in both Tradeweb Markets and CIFI Holdings 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 Tradeweb Markets and CIFI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradeweb Markets and CIFI Holdings Co, you can compare the effects of market volatilities on Tradeweb Markets and CIFI Holdings 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 Tradeweb Markets with a short position of CIFI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradeweb Markets and CIFI Holdings.
Diversification Opportunities for Tradeweb Markets and CIFI Holdings
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tradeweb and CIFI is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Tradeweb Markets and CIFI Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIFI Holdings and Tradeweb Markets 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 Tradeweb Markets are associated (or correlated) with CIFI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIFI Holdings has no effect on the direction of Tradeweb Markets i.e., Tradeweb Markets and CIFI Holdings go up and down completely randomly.
Pair Corralation between Tradeweb Markets and CIFI Holdings
Assuming the 90 days horizon Tradeweb Markets is expected to generate 2.39 times less return on investment than CIFI Holdings. But when comparing it to its historical volatility, Tradeweb Markets is 7.11 times less risky than CIFI Holdings. It trades about 0.1 of its potential returns per unit of risk. CIFI Holdings Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11.00 in CIFI Holdings Co on September 12, 2024 and sell it today you would lose (7.70) from holding CIFI Holdings Co or give up 70.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradeweb Markets vs. CIFI Holdings Co
Performance |
| Timeline |
| Tradeweb Markets |
| CIFI Holdings |
Tradeweb Markets and CIFI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradeweb Markets and CIFI Holdings
The main advantage of trading using opposite Tradeweb Markets and CIFI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradeweb Markets position performs unexpectedly, CIFI Holdings 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 CIFI Holdings will offset losses from the drop in CIFI Holdings' long position.| Tradeweb Markets vs. ALGOMA STEEL GROUP | Tradeweb Markets vs. Dave Busters Entertainment | Tradeweb Markets vs. JD SPORTS FASH | Tradeweb Markets vs. CosmoSteel Holdings Limited |
| CIFI Holdings vs. Canon Marketing Japan | CIFI Holdings vs. Fast Retailing Co | CIFI Holdings vs. Tradeweb Markets | CIFI Holdings vs. SIMS METAL MGT |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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