Correlation Between CFI Holding and CEZ As
Can any of the company-specific risk be diversified away by investing in both CFI Holding and CEZ As 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 CEZ As 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 CEZ as, you can compare the effects of market volatilities on CFI Holding and CEZ As 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 CEZ As. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFI Holding and CEZ As.
Diversification Opportunities for CFI Holding and CEZ As
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CFI and CEZ is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and CEZ as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEZ as 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 CEZ As. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEZ as has no effect on the direction of CFI Holding i.e., CFI Holding and CEZ As go up and down completely randomly.
Pair Corralation between CFI Holding and CEZ As
Assuming the 90 days trading horizon CFI Holding SA is expected to under-perform the CEZ As. In addition to that, CFI Holding is 2.32 times more volatile than CEZ as. It trades about -0.2 of its total potential returns per unit of risk. CEZ as is currently generating about -0.09 per unit of volatility. If you would invest 17,190 in CEZ as on November 27, 2024 and sell it today you would lose (540.00) from holding CEZ as or give up 3.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CFI Holding SA vs. CEZ as
Performance |
| Timeline |
| CFI Holding SA |
| CEZ as |
CFI Holding and CEZ As Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFI Holding and CEZ As
The main advantage of trading using opposite CFI Holding and CEZ As positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFI Holding position performs unexpectedly, CEZ As 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 CEZ As will offset losses from the drop in CEZ As' long position.| CFI Holding vs. Ultimate Games SA | CFI Holding vs. Quantum Software SA | CFI Holding vs. True Games Syndicate | CFI Holding vs. Echo Investment SA |
| CEZ As vs. VR Factory Games | CEZ As vs. All In Games | CEZ As vs. GreenX Metals | CEZ As vs. Ultimate Games 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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