Correlation Between CFI Holding and Asseco South
Can any of the company-specific risk be diversified away by investing in both CFI Holding and Asseco South 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 Asseco South 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 Asseco South Eastern, you can compare the effects of market volatilities on CFI Holding and Asseco South 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 Asseco South. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFI Holding and Asseco South.
Diversification Opportunities for CFI Holding and Asseco South
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CFI and Asseco is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and Asseco South Eastern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asseco South Eastern 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 Asseco South. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asseco South Eastern has no effect on the direction of CFI Holding i.e., CFI Holding and Asseco South go up and down completely randomly.
Pair Corralation between CFI Holding and Asseco South
Assuming the 90 days trading horizon CFI Holding SA is expected to generate 2.69 times more return on investment than Asseco South. However, CFI Holding is 2.69 times more volatile than Asseco South Eastern. It trades about 0.01 of its potential returns per unit of risk. Asseco South Eastern is currently generating about 0.02 per unit of risk. If you would invest 24.00 in CFI Holding SA on November 2, 2024 and sell it today you would lose (5.00) from holding CFI Holding SA or give up 20.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CFI Holding SA vs. Asseco South Eastern
Performance |
| Timeline |
| CFI Holding SA |
| Asseco South Eastern |
CFI Holding and Asseco South Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFI Holding and Asseco South
The main advantage of trading using opposite CFI Holding and Asseco South positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFI Holding position performs unexpectedly, Asseco South 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 Asseco South will offset losses from the drop in Asseco South's long position.| CFI Holding vs. Medicalg | CFI Holding vs. SOFTWARE MANSION SPOLKA | CFI Holding vs. BNP Paribas Bank | CFI Holding vs. PMPG Polskie Media |
| Asseco South vs. ING Bank lski | Asseco South vs. Investment Friends Capital | Asseco South vs. UniCredit SpA | Asseco South vs. Echo Investment 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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