Correlation Between CFI Holding and Gobarto SA
Can any of the company-specific risk be diversified away by investing in both CFI Holding and Gobarto SA 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 Gobarto SA 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 Gobarto SA, you can compare the effects of market volatilities on CFI Holding and Gobarto SA 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 Gobarto SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFI Holding and Gobarto SA.
Diversification Opportunities for CFI Holding and Gobarto SA
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CFI and Gobarto is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and Gobarto SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gobarto 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 Gobarto SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gobarto SA has no effect on the direction of CFI Holding i.e., CFI Holding and Gobarto SA go up and down completely randomly.
Pair Corralation between CFI Holding and Gobarto SA
Assuming the 90 days trading horizon CFI Holding SA is expected to under-perform the Gobarto SA. In addition to that, CFI Holding is 1.95 times more volatile than Gobarto SA. It trades about -0.04 of its total potential returns per unit of risk. Gobarto SA is currently generating about -0.05 per unit of volatility. If you would invest 3,300 in Gobarto SA on August 30, 2024 and sell it today you would lose (140.00) from holding Gobarto SA or give up 4.24% 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. Gobarto SA
Performance |
| Timeline |
| CFI Holding SA |
| Gobarto SA |
CFI Holding and Gobarto SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFI Holding and Gobarto SA
The main advantage of trading using opposite CFI Holding and Gobarto SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFI Holding position performs unexpectedly, Gobarto SA 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 Gobarto SA will offset losses from the drop in Gobarto SA's long position.| CFI Holding vs. Tower Investments SA | CFI Holding vs. Centrum Finansowe Banku | CFI Holding vs. Alior Bank SA | CFI Holding vs. Santander Bank Polska |
| Gobarto SA vs. Carlson Investments SA | Gobarto SA vs. PZ Cormay SA | Gobarto SA vs. Detalion Games SA | Gobarto SA vs. Baked 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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