Correlation Between Asseco Business and CFI Holding
Can any of the company-specific risk be diversified away by investing in both Asseco Business and CFI Holding 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 Asseco Business and CFI Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asseco Business Solutions and CFI Holding SA, you can compare the effects of market volatilities on Asseco Business and CFI Holding 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 Asseco Business with a short position of CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asseco Business and CFI Holding.
Diversification Opportunities for Asseco Business and CFI Holding
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asseco and CFI is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Asseco Business Solutions and CFI Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CFI Holding SA and Asseco Business 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 Asseco Business Solutions are associated (or correlated) with CFI Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CFI Holding SA has no effect on the direction of Asseco Business i.e., Asseco Business and CFI Holding go up and down completely randomly.
Pair Corralation between Asseco Business and CFI Holding
Assuming the 90 days trading horizon Asseco Business Solutions is expected to under-perform the CFI Holding. But the stock apears to be less risky and, when comparing its historical volatility, Asseco Business Solutions is 4.88 times less risky than CFI Holding. The stock trades about -0.29 of its potential returns per unit of risk. The CFI Holding SA is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 20.00 in CFI Holding SA on August 30, 2024 and sell it today you would lose (2.00) from holding CFI Holding SA or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asseco Business Solutions vs. CFI Holding SA
Performance |
| Timeline |
| Asseco Business Solutions |
| CFI Holding SA |
Asseco Business and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asseco Business and CFI Holding
The main advantage of trading using opposite Asseco Business and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asseco Business position performs unexpectedly, CFI Holding 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 CFI Holding will offset losses from the drop in CFI Holding's long position.The idea behind Asseco Business Solutions and CFI Holding SA 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.| CFI Holding vs. Tower Investments SA | CFI Holding vs. Centrum Finansowe Banku | CFI Holding vs. Alior Bank SA | CFI Holding vs. Santander Bank Polska |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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