Correlation Between Centrum Finansowe and CFI Holding
Can any of the company-specific risk be diversified away by investing in both Centrum Finansowe and CFI Holding 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 Centrum Finansowe and CFI Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrum Finansowe Banku and CFI Holding SA, you can compare the effects of market volatilities on Centrum Finansowe and CFI Holding 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 Centrum Finansowe with a short position of CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrum Finansowe and CFI Holding.
Diversification Opportunities for Centrum Finansowe and CFI Holding
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centrum and CFI is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Centrum Finansowe Banku and CFI Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CFI Holding SA and Centrum Finansowe 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 Centrum Finansowe Banku are associated (or correlated) with CFI Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CFI Holding SA has no effect on the direction of Centrum Finansowe i.e., Centrum Finansowe and CFI Holding go up and down completely randomly.
Pair Corralation between Centrum Finansowe and CFI Holding
Assuming the 90 days trading horizon Centrum Finansowe Banku is expected to generate 0.49 times more return on investment than CFI Holding. However, Centrum Finansowe Banku is 2.03 times less risky than CFI Holding. It trades about 0.08 of its potential returns per unit of risk. CFI Holding SA is currently generating about -0.03 per unit of risk. If you would invest 419.00 in Centrum Finansowe Banku on September 1, 2024 and sell it today you would earn a total of 161.00 from holding Centrum Finansowe Banku or generate 38.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.26% |
| Values | Daily Returns |
Centrum Finansowe Banku vs. CFI Holding SA
Performance |
| Timeline |
| Centrum Finansowe Banku |
| CFI Holding SA |
Centrum Finansowe and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrum Finansowe and CFI Holding
The main advantage of trading using opposite Centrum Finansowe and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrum Finansowe position performs unexpectedly, CFI Holding 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 CFI Holding will offset losses from the drop in CFI Holding's long position.| Centrum Finansowe vs. Intersport Polska SA | Centrum Finansowe vs. Drago entertainment SA | Centrum Finansowe vs. UF Games SA | Centrum Finansowe vs. PMPG Polskie Media |
| CFI Holding vs. Banco Santander SA | CFI Holding vs. UniCredit SpA | CFI Holding vs. CEZ as | CFI Holding 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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