Correlation Between Asseco South and CFI Holding
Can any of the company-specific risk be diversified away by investing in both Asseco South 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 South 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 South Eastern and CFI Holding SA, you can compare the effects of market volatilities on Asseco South 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 South with a short position of CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asseco South and CFI Holding.
Diversification Opportunities for Asseco South and CFI Holding
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Asseco and CFI is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Asseco South Eastern 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 South 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 South Eastern 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 South i.e., Asseco South and CFI Holding go up and down completely randomly.
Pair Corralation between Asseco South and CFI Holding
Assuming the 90 days trading horizon Asseco South Eastern is expected to generate 0.39 times more return on investment than CFI Holding. However, Asseco South Eastern is 2.58 times less risky than CFI Holding. It trades about 0.01 of its potential returns per unit of risk. CFI Holding SA is currently generating about -0.05 per unit of risk. If you would invest 4,956 in Asseco South Eastern on August 26, 2024 and sell it today you would earn a total of 14.00 from holding Asseco South Eastern or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asseco South Eastern vs. CFI Holding SA
Performance |
| Timeline |
| Asseco South Eastern |
| CFI Holding SA |
Asseco South and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asseco South and CFI Holding
The main advantage of trading using opposite Asseco South and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asseco South 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.| Asseco South vs. Echo Investment SA | Asseco South vs. Mlk Foods Public | Asseco South vs. Quantum Software SA | Asseco South vs. Cloud Technologies SA |
| CFI Holding vs. LSI Software SA | CFI Holding vs. Play2Chill SA | CFI Holding vs. Movie Games SA | CFI Holding vs. Noble Financials 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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