Correlation Between CFI Holding and ADX
Can any of the company-specific risk be diversified away by investing in both CFI Holding and ADX 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 CFI Holding and ADX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CFI Holding SA and ADX, you can compare the effects of market volatilities on CFI Holding and ADX 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 CFI Holding with a short position of ADX. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFI Holding and ADX.
Diversification Opportunities for CFI Holding and ADX
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CFI and ADX is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and ADX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADX and CFI Holding 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 CFI Holding SA are associated (or correlated) with ADX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADX has no effect on the direction of CFI Holding i.e., CFI Holding and ADX go up and down completely randomly.
Pair Corralation between CFI Holding and ADX
Assuming the 90 days trading horizon CFI Holding SA is expected to under-perform the ADX. In addition to that, CFI Holding is 1.86 times more volatile than ADX. It trades about 0.0 of its total potential returns per unit of risk. ADX is currently generating about 0.08 per unit of volatility. If you would invest 26.00 in ADX on August 27, 2024 and sell it today you would earn a total of 1.00 from holding ADX or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 84.21% |
| Values | Daily Returns |
CFI Holding SA vs. ADX
Performance |
| Timeline |
| CFI Holding SA |
| ADX |
CFI Holding and ADX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFI Holding and ADX
The main advantage of trading using opposite CFI Holding and ADX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFI Holding position performs unexpectedly, ADX 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 ADX will offset losses from the drop in ADX's long position.| CFI Holding vs. Banco Santander SA | CFI Holding vs. UniCredit SpA | CFI Holding vs. CEZ as | CFI Holding vs. Polski Koncern Naftowy |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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