Correlation Between CFI Holding and GI Group
Can any of the company-specific risk be diversified away by investing in both CFI Holding and GI Group 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 GI Group 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 GI Group Poland, you can compare the effects of market volatilities on CFI Holding and GI Group 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 GI Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFI Holding and GI Group.
Diversification Opportunities for CFI Holding and GI Group
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CFI and GIG is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and GI Group Poland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GI Group Poland 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 GI Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GI Group Poland has no effect on the direction of CFI Holding i.e., CFI Holding and GI Group go up and down completely randomly.
Pair Corralation between CFI Holding and GI Group
Assuming the 90 days trading horizon CFI Holding SA is expected to under-perform the GI Group. In addition to that, CFI Holding is 3.48 times more volatile than GI Group Poland. It trades about -0.08 of its total potential returns per unit of risk. GI Group Poland is currently generating about -0.02 per unit of volatility. If you would invest 145.00 in GI Group Poland on September 13, 2024 and sell it today you would lose (3.00) from holding GI Group Poland or give up 2.07% 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. GI Group Poland
Performance |
| Timeline |
| CFI Holding SA |
| GI Group Poland |
CFI Holding and GI Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFI Holding and GI Group
The main advantage of trading using opposite CFI Holding and GI Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFI Holding position performs unexpectedly, GI Group 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 GI Group will offset losses from the drop in GI Group's long position.| CFI Holding vs. Echo Investment SA | CFI Holding vs. Centrum Finansowe Banku | CFI Holding vs. Gaming Factory SA | CFI Holding vs. Detalion Games SA |
| GI Group vs. Asseco South Eastern | GI Group vs. Vercom SA | GI Group vs. CFI Holding SA | GI Group vs. Gobarto 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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