Correlation Between CFI Holding and Inpro SA
Can any of the company-specific risk be diversified away by investing in both CFI Holding and Inpro 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 Inpro 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 Inpro SA, you can compare the effects of market volatilities on CFI Holding and Inpro 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 Inpro SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFI Holding and Inpro SA.
Diversification Opportunities for CFI Holding and Inpro SA
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CFI and Inpro is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and Inpro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inpro 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 Inpro SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inpro SA has no effect on the direction of CFI Holding i.e., CFI Holding and Inpro SA go up and down completely randomly.
Pair Corralation between CFI Holding and Inpro SA
Assuming the 90 days trading horizon CFI Holding SA is expected to generate 2.55 times more return on investment than Inpro SA. However, CFI Holding is 2.55 times more volatile than Inpro SA. It trades about -0.03 of its potential returns per unit of risk. Inpro SA is currently generating about -0.12 per unit of risk. If you would invest 20.00 in CFI Holding SA on September 12, 2024 and sell it today you would lose (3.00) from holding CFI Holding SA or give up 15.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
CFI Holding SA vs. Inpro SA
Performance |
| Timeline |
| CFI Holding SA |
| Inpro SA |
CFI Holding and Inpro SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFI Holding and Inpro SA
The main advantage of trading using opposite CFI Holding and Inpro SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFI Holding position performs unexpectedly, Inpro 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 Inpro SA will offset losses from the drop in Inpro SA's long position.| CFI Holding vs. Igoria Trade SA | CFI Holding vs. ING Bank lski | CFI Holding vs. Drago entertainment SA | CFI Holding vs. Enter Air SA |
| Inpro SA vs. Santander Bank Polska | Inpro SA vs. Noble Financials SA | Inpro SA vs. MW Trade SA | Inpro SA vs. BNP Paribas Bank |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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