Correlation Between CFI Holding and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both CFI Holding and KGHM Polska 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 KGHM Polska 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 KGHM Polska Miedz, you can compare the effects of market volatilities on CFI Holding and KGHM Polska 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 KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFI Holding and KGHM Polska.
Diversification Opportunities for CFI Holding and KGHM Polska
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CFI and KGHM is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz 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 KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of CFI Holding i.e., CFI Holding and KGHM Polska go up and down completely randomly.
Pair Corralation between CFI Holding and KGHM Polska
Assuming the 90 days trading horizon CFI Holding SA is expected to under-perform the KGHM Polska. In addition to that, CFI Holding is 1.5 times more volatile than KGHM Polska Miedz. It trades about -0.05 of its total potential returns per unit of risk. KGHM Polska Miedz is currently generating about -0.05 per unit of volatility. If you would invest 15,261 in KGHM Polska Miedz on September 1, 2024 and sell it today you would lose (2,536) from holding KGHM Polska Miedz or give up 16.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
CFI Holding SA vs. KGHM Polska Miedz
Performance |
| Timeline |
| CFI Holding SA |
| KGHM Polska Miedz |
CFI Holding and KGHM Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFI Holding and KGHM Polska
The main advantage of trading using opposite CFI Holding and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFI Holding position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska'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 |
| KGHM Polska vs. GreenX Metals | KGHM Polska vs. Gamedust SA | KGHM Polska vs. Mlk Foods Public | KGHM Polska vs. Alior Bank 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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