Correlation Between Inpro SA and CFI Holding
Can any of the company-specific risk be diversified away by investing in both Inpro SA 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 Inpro SA and CFI Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inpro SA and CFI Holding SA, you can compare the effects of market volatilities on Inpro SA 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 Inpro SA with a short position of CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inpro SA and CFI Holding.
Diversification Opportunities for Inpro SA and CFI Holding
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Inpro and CFI is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Inpro SA 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 Inpro SA 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 Inpro SA 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 Inpro SA i.e., Inpro SA and CFI Holding go up and down completely randomly.
Pair Corralation between Inpro SA and CFI Holding
Assuming the 90 days trading horizon Inpro SA is expected to generate 0.26 times more return on investment than CFI Holding. However, Inpro SA is 3.88 times less risky than CFI Holding. It trades about -0.06 of its potential returns per unit of risk. CFI Holding SA is currently generating about -0.06 per unit of risk. If you would invest 640.00 in Inpro SA on September 13, 2024 and sell it today you would lose (20.00) from holding Inpro SA or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inpro SA vs. CFI Holding SA
Performance |
| Timeline |
| Inpro SA |
| CFI Holding SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Inpro SA and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inpro SA and CFI Holding
The main advantage of trading using opposite Inpro SA and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inpro SA 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.| Inpro SA vs. Quantum Software SA | Inpro SA vs. Road Studio SA | Inpro SA vs. X Trade Brokers | Inpro SA vs. Varsav Game Studios |
| CFI Holding vs. Intersport Polska SA | CFI Holding vs. Mlk Foods Public | CFI Holding vs. True Games Syndicate | CFI Holding vs. Pyramid Games 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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