Correlation Between CFI Holding and Allegroeu
Can any of the company-specific risk be diversified away by investing in both CFI Holding and Allegroeu 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 Allegroeu 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 Allegroeu SA, you can compare the effects of market volatilities on CFI Holding and Allegroeu 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 Allegroeu. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFI Holding and Allegroeu.
Diversification Opportunities for CFI Holding and Allegroeu
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CFI and Allegroeu is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and Allegroeu SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegroeu SA 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 Allegroeu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegroeu SA has no effect on the direction of CFI Holding i.e., CFI Holding and Allegroeu go up and down completely randomly.
Pair Corralation between CFI Holding and Allegroeu
Assuming the 90 days trading horizon CFI Holding SA is expected to generate 2.14 times more return on investment than Allegroeu. However, CFI Holding is 2.14 times more volatile than Allegroeu SA. It trades about -0.04 of its potential returns per unit of risk. Allegroeu SA is currently generating about -0.31 per unit of risk. If you would invest 20.00 in CFI Holding SA on August 30, 2024 and sell it today you would lose (2.00) from holding CFI Holding SA or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CFI Holding SA vs. Allegroeu SA
Performance |
| Timeline |
| CFI Holding SA |
| Allegroeu SA |
CFI Holding and Allegroeu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFI Holding and Allegroeu
The main advantage of trading using opposite CFI Holding and Allegroeu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFI Holding position performs unexpectedly, Allegroeu 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 Allegroeu will offset losses from the drop in Allegroeu's long position.| CFI Holding vs. mBank SA | CFI Holding vs. Tower Investments SA | CFI Holding vs. MCI Management SA | CFI Holding vs. Echo Investment SA |
| Allegroeu vs. Immobile | Allegroeu vs. Noble Financials SA | Allegroeu vs. Centrum Finansowe Banku | Allegroeu vs. Alior Bank 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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