Correlation Between CFI Holding and Mlk Foods
Can any of the company-specific risk be diversified away by investing in both CFI Holding and Mlk Foods 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 Mlk Foods 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 Mlk Foods Public, you can compare the effects of market volatilities on CFI Holding and Mlk Foods 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 Mlk Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFI Holding and Mlk Foods.
Diversification Opportunities for CFI Holding and Mlk Foods
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CFI and Mlk is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and Mlk Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mlk Foods Public 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 Mlk Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mlk Foods Public has no effect on the direction of CFI Holding i.e., CFI Holding and Mlk Foods go up and down completely randomly.
Pair Corralation between CFI Holding and Mlk Foods
Assuming the 90 days trading horizon CFI Holding SA is expected to under-perform the Mlk Foods. In addition to that, CFI Holding is 1.24 times more volatile than Mlk Foods Public. It trades about -0.08 of its total potential returns per unit of risk. Mlk Foods Public is currently generating about 0.07 per unit of volatility. If you would invest 108.00 in Mlk Foods Public on September 1, 2024 and sell it today you would earn a total of 6.00 from holding Mlk Foods Public or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
CFI Holding SA vs. Mlk Foods Public
Performance |
| Timeline |
| CFI Holding SA |
| Mlk Foods Public |
CFI Holding and Mlk Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFI Holding and Mlk Foods
The main advantage of trading using opposite CFI Holding and Mlk Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFI Holding position performs unexpectedly, Mlk Foods 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 Mlk Foods will offset losses from the drop in Mlk Foods' long position.| CFI Holding vs. Banco Santander SA | CFI Holding vs. UniCredit SpA | CFI Holding vs. CEZ as | CFI Holding vs. Polski Koncern Naftowy |
| Mlk Foods vs. CI Games SA | Mlk Foods vs. Baked Games SA | Mlk Foods vs. SOFTWARE MANSION SPOLKA | Mlk Foods vs. ING Bank lski |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |