Correlation Between CFI Holding and PCF Group
Can any of the company-specific risk be diversified away by investing in both CFI Holding and PCF Group 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 PCF Group 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 PCF Group SA, you can compare the effects of market volatilities on CFI Holding and PCF Group 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 PCF Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFI Holding and PCF Group.
Diversification Opportunities for CFI Holding and PCF Group
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CFI and PCF is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and PCF Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCF Group 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 PCF Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCF Group SA has no effect on the direction of CFI Holding i.e., CFI Holding and PCF Group go up and down completely randomly.
Pair Corralation between CFI Holding and PCF Group
Assuming the 90 days trading horizon CFI Holding SA is expected to generate 1.47 times more return on investment than PCF Group. However, CFI Holding is 1.47 times more volatile than PCF Group SA. It trades about -0.05 of its potential returns per unit of risk. PCF Group SA is currently generating about -0.24 per unit of risk. If you would invest 23.00 in CFI Holding SA on August 26, 2024 and sell it today you would lose (6.00) from holding CFI Holding SA or give up 26.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CFI Holding SA vs. PCF Group SA
Performance |
| Timeline |
| CFI Holding SA |
| PCF Group SA |
CFI Holding and PCF Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFI Holding and PCF Group
The main advantage of trading using opposite CFI Holding and PCF Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFI Holding position performs unexpectedly, PCF Group 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 PCF Group will offset losses from the drop in PCF Group's long position.| CFI Holding vs. LSI Software SA | CFI Holding vs. Play2Chill SA | CFI Holding vs. Movie Games SA | CFI Holding vs. Noble Financials SA |
| PCF Group vs. Banco Santander SA | PCF Group vs. UniCredit SpA | PCF Group vs. CEZ as | PCF Group vs. Polski Koncern Naftowy |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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