Correlation Between CFI Holding and KCI SA
Can any of the company-specific risk be diversified away by investing in both CFI Holding and KCI 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 KCI 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 KCI SA, you can compare the effects of market volatilities on CFI Holding and KCI 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 KCI SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFI Holding and KCI SA.
Diversification Opportunities for CFI Holding and KCI SA
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between CFI and KCI is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and KCI SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCI 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 KCI SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCI SA has no effect on the direction of CFI Holding i.e., CFI Holding and KCI SA go up and down completely randomly.
Pair Corralation between CFI Holding and KCI SA
Assuming the 90 days trading horizon CFI Holding SA is expected to under-perform the KCI SA. In addition to that, CFI Holding is 6.22 times more volatile than KCI SA. It trades about -0.08 of its total potential returns per unit of risk. KCI SA is currently generating about 0.01 per unit of volatility. If you would invest 80.00 in KCI SA on September 1, 2024 and sell it today you would earn a total of 0.00 from holding KCI SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
CFI Holding SA vs. KCI SA
Performance |
| Timeline |
| CFI Holding SA |
| KCI SA |
CFI Holding and KCI SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFI Holding and KCI SA
The main advantage of trading using opposite CFI Holding and KCI SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFI Holding position performs unexpectedly, KCI 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 KCI SA will offset losses from the drop in KCI SA's long position.| CFI Holding vs. Banco Santander SA | CFI Holding vs. UniCredit SpA | CFI Holding vs. CEZ as | CFI Holding vs. Polski Koncern Naftowy |
| KCI SA vs. Asseco Business Solutions | KCI SA vs. Detalion Games SA | KCI SA vs. Asseco South Eastern | KCI SA vs. CFI Holding 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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