Correlation Between CEZ As and CFI Holding
Can any of the company-specific risk be diversified away by investing in both CEZ As 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 CEZ As and CFI Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEZ as and CFI Holding SA, you can compare the effects of market volatilities on CEZ As 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 CEZ As with a short position of CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEZ As and CFI Holding.
Diversification Opportunities for CEZ As and CFI Holding
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CEZ and CFI is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding CEZ as 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 CEZ As 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 CEZ as 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 CEZ As i.e., CEZ As and CFI Holding go up and down completely randomly.
Pair Corralation between CEZ As and CFI Holding
Assuming the 90 days trading horizon CEZ as is expected to generate 0.44 times more return on investment than CFI Holding. However, CEZ as is 2.28 times less risky than CFI Holding. It trades about 0.05 of its potential returns per unit of risk. CFI Holding SA is currently generating about -0.01 per unit of risk. If you would invest 15,197 in CEZ as on November 11, 2024 and sell it today you would earn a total of 2,003 from holding CEZ as or generate 13.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEZ as vs. CFI Holding SA
Performance |
| Timeline |
| CEZ as |
| CFI Holding SA |
CEZ As and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEZ As and CFI Holding
The main advantage of trading using opposite CEZ As and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEZ As 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.| CEZ As vs. Road Studio SA | CEZ As vs. True Games Syndicate | CEZ As vs. Mercator Medical SA | CEZ As vs. Medicofarma Biotech SA |
| CFI Holding vs. GreenX Metals | CFI Holding vs. Investment Friends Capital | CFI Holding vs. Movie Games SA | CFI Holding vs. Examobile 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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