Correlation Between CF Acquisition and Growth For
Can any of the company-specific risk be diversified away by investing in both CF Acquisition and Growth For 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 CF Acquisition and Growth For into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Acquisition VII and Growth For Good, you can compare the effects of market volatilities on CF Acquisition and Growth For 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 CF Acquisition with a short position of Growth For. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Acquisition and Growth For.
Diversification Opportunities for CF Acquisition and Growth For
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CFFSU and Growth is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CF Acquisition VII and Growth For Good in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth For Good and CF Acquisition 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 CF Acquisition VII are associated (or correlated) with Growth For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth For Good has no effect on the direction of CF Acquisition i.e., CF Acquisition and Growth For go up and down completely randomly.
Pair Corralation between CF Acquisition and Growth For
Assuming the 90 days horizon CF Acquisition is expected to generate 1.82 times less return on investment than Growth For. But when comparing it to its historical volatility, CF Acquisition VII is 1.67 times less risky than Growth For. It trades about 0.05 of its potential returns per unit of risk. Growth For Good is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,009 in Growth For Good on August 30, 2024 and sell it today you would earn a total of 52.00 from holding Growth For Good or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.11% |
| Values | Daily Returns |
CF Acquisition VII vs. Growth For Good
Performance |
| Timeline |
| CF Acquisition VII |
| Growth For Good |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CF Acquisition and Growth For Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Acquisition and Growth For
The main advantage of trading using opposite CF Acquisition and Growth For positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Acquisition position performs unexpectedly, Growth For 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 Growth For will offset losses from the drop in Growth For's long position.| CF Acquisition vs. Patria Latin American | CF Acquisition vs. ABIVAX Socit Anonyme | CF Acquisition vs. Pinnacle Sherman Multi Strategy | CF Acquisition vs. Morningstar Unconstrained Allocation |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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