Correlation Between Alior Bank and CFI Holding
Can any of the company-specific risk be diversified away by investing in both Alior Bank 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 Alior Bank and CFI Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alior Bank SA and CFI Holding SA, you can compare the effects of market volatilities on Alior Bank 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 Alior Bank with a short position of CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and CFI Holding.
Diversification Opportunities for Alior Bank and CFI Holding
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alior and CFI is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA 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 Alior Bank 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 Alior Bank SA 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 Alior Bank i.e., Alior Bank and CFI Holding go up and down completely randomly.
Pair Corralation between Alior Bank and CFI Holding
Assuming the 90 days trading horizon Alior Bank SA is expected to generate 0.52 times more return on investment than CFI Holding. However, Alior Bank SA is 1.91 times less risky than CFI Holding. It trades about 0.08 of its potential returns per unit of risk. CFI Holding SA is currently generating about -0.2 per unit of risk. If you would invest 9,208 in Alior Bank SA on November 27, 2024 and sell it today you would earn a total of 276.00 from holding Alior Bank SA or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alior Bank SA vs. CFI Holding SA
Performance |
| Timeline |
| Alior Bank SA |
| CFI Holding SA |
Alior Bank and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and CFI Holding
The main advantage of trading using opposite Alior Bank and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank 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.| Alior Bank vs. Movie Games SA | Alior Bank vs. Road Studio SA | Alior Bank vs. TEN SQUARE GAMES | Alior Bank vs. Marie Brizard Wine |
| CFI Holding vs. Ultimate Games SA | CFI Holding vs. Quantum Software SA | CFI Holding vs. True Games Syndicate | CFI Holding vs. Echo Investment SA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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