Correlation Between HIGHTECH PAYMENT and CFG BANK

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Can any of the company-specific risk be diversified away by investing in both HIGHTECH PAYMENT and CFG BANK 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 HIGHTECH PAYMENT and CFG BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HIGHTECH PAYMENT SYSTEMS and CFG BANK, you can compare the effects of market volatilities on HIGHTECH PAYMENT and CFG BANK 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 HIGHTECH PAYMENT with a short position of CFG BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of HIGHTECH PAYMENT and CFG BANK.

Diversification Opportunities for HIGHTECH PAYMENT and CFG BANK

HIGHTECHCFGDiversified AwayHIGHTECHCFGDiversified Away100%
0.91
  Correlation Coefficient

Almost no diversification

The 3 months correlation between HIGHTECH and CFG is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding HIGHTECH PAYMENT SYSTEMS and CFG BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CFG BANK and HIGHTECH PAYMENT 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 HIGHTECH PAYMENT SYSTEMS are associated (or correlated) with CFG BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CFG BANK has no effect on the direction of HIGHTECH PAYMENT i.e., HIGHTECH PAYMENT and CFG BANK go up and down completely randomly.

Pair Corralation between HIGHTECH PAYMENT and CFG BANK

Assuming the 90 days trading horizon HIGHTECH PAYMENT SYSTEMS is expected to under-perform the CFG BANK. In addition to that, HIGHTECH PAYMENT is 1.88 times more volatile than CFG BANK. It trades about -0.13 of its total potential returns per unit of risk. CFG BANK is currently generating about -0.09 per unit of volatility. If you would invest  24,300  in CFG BANK on December 2, 2024 and sell it today you would lose (600.00) from holding CFG BANK or give up 2.47% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

HIGHTECH PAYMENT SYSTEMS  vs.  CFG BANK

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0510152025
JavaScript chart by amCharts 3.21.15HPS CFG-BANK
       Timeline  
HIGHTECH PAYMENT SYSTEMS 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in HIGHTECH PAYMENT SYSTEMS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, HIGHTECH PAYMENT exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebFebMar550600650700
CFG BANK 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CFG BANK are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental drivers, CFG BANK displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebFebMar210220230240250

HIGHTECH PAYMENT and CFG BANK Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.47-4.1-2.73-1.350.01.442.914.375.84 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15HPS CFG-BANK
       Returns  

Pair Trading with HIGHTECH PAYMENT and CFG BANK

The main advantage of trading using opposite HIGHTECH PAYMENT and CFG BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HIGHTECH PAYMENT position performs unexpectedly, CFG BANK 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 CFG BANK will offset losses from the drop in CFG BANK's long position.
The idea behind HIGHTECH PAYMENT SYSTEMS and CFG BANK pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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