Correlation Between CFI Holding and VR Factory
Can any of the company-specific risk be diversified away by investing in both CFI Holding and VR Factory 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 VR Factory 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 VR Factory Games, you can compare the effects of market volatilities on CFI Holding and VR Factory 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 VR Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFI Holding and VR Factory.
Diversification Opportunities for CFI Holding and VR Factory
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CFI and VRF is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and VR Factory Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VR Factory Games 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 VR Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VR Factory Games has no effect on the direction of CFI Holding i.e., CFI Holding and VR Factory go up and down completely randomly.
Pair Corralation between CFI Holding and VR Factory
Assuming the 90 days trading horizon CFI Holding SA is expected to under-perform the VR Factory. In addition to that, CFI Holding is 1.15 times more volatile than VR Factory Games. It trades about -0.08 of its total potential returns per unit of risk. VR Factory Games is currently generating about -0.02 per unit of volatility. If you would invest 34.00 in VR Factory Games on September 2, 2024 and sell it today you would lose (2.00) from holding VR Factory Games or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
CFI Holding SA vs. VR Factory Games
Performance |
| Timeline |
| CFI Holding SA |
| VR Factory Games |
CFI Holding and VR Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFI Holding and VR Factory
The main advantage of trading using opposite CFI Holding and VR Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFI Holding position performs unexpectedly, VR Factory 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 VR Factory will offset losses from the drop in VR Factory's long position.| CFI Holding vs. CI Games SA | CFI Holding vs. SOFTWARE MANSION SPOLKA | CFI Holding vs. BNP Paribas Bank | CFI Holding vs. Varsav Game Studios |
| VR Factory vs. Echo Investment SA | VR Factory vs. Baked Games SA | VR Factory vs. Varsav Game Studios | VR Factory vs. Carlson Investments 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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