Correlation Between CFG BANK and SMI
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By analyzing existing cross correlation between CFG BANK and SMI, you can compare the effects of market volatilities on CFG BANK and SMI 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 CFG BANK with a short position of SMI. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFG BANK and SMI.
Diversification Opportunities for CFG BANK and SMI
Poor diversification
The 3 months correlation between CFG and SMI is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CFG BANK and SMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMI and CFG 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 CFG BANK are associated (or correlated) with SMI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMI has no effect on the direction of CFG BANK i.e., CFG BANK and SMI go up and down completely randomly.
Pair Corralation between CFG BANK and SMI
Assuming the 90 days trading horizon CFG BANK is expected to generate 0.67 times more return on investment than SMI. However, CFG BANK is 1.49 times less risky than SMI. It trades about 0.15 of its potential returns per unit of risk. SMI is currently generating about 0.05 per unit of risk. If you would invest 12,095 in CFG BANK on December 1, 2024 and sell it today you would earn a total of 11,605 from holding CFG BANK or generate 95.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 60.7% |
| Values | Daily Returns |
CFG BANK vs. SMI
Performance |
| Timeline |
| CFG BANK |
| SMI |
CFG BANK and SMI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFG BANK and SMI
The main advantage of trading using opposite CFG BANK and SMI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFG BANK position performs unexpectedly, SMI 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 SMI will offset losses from the drop in SMI's long position.| CFG BANK vs. CREDIT IMMOBILIER ET | ||
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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