Correlation Between Mlk Foods and CFI Holding
Can any of the company-specific risk be diversified away by investing in both Mlk Foods 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 Mlk Foods and CFI Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mlk Foods Public and CFI Holding SA, you can compare the effects of market volatilities on Mlk Foods 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 Mlk Foods with a short position of CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mlk Foods and CFI Holding.
Diversification Opportunities for Mlk Foods and CFI Holding
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mlk and CFI is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Mlk Foods Public 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 Mlk Foods 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 Mlk Foods Public 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 Mlk Foods i.e., Mlk Foods and CFI Holding go up and down completely randomly.
Pair Corralation between Mlk Foods and CFI Holding
Assuming the 90 days trading horizon Mlk Foods Public is expected to generate 3.85 times more return on investment than CFI Holding. However, Mlk Foods is 3.85 times more volatile than CFI Holding SA. It trades about 0.26 of its potential returns per unit of risk. CFI Holding SA is currently generating about -0.19 per unit of risk. If you would invest 138.00 in Mlk Foods Public on December 4, 2024 and sell it today you would earn a total of 111.00 from holding Mlk Foods Public or generate 80.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mlk Foods Public vs. CFI Holding SA
Performance |
| Timeline |
| Mlk Foods Public |
| CFI Holding SA |
Mlk Foods and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mlk Foods and CFI Holding
The main advantage of trading using opposite Mlk Foods and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mlk Foods 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.| Mlk Foods vs. X Trade Brokers | Mlk Foods vs. Datawalk SA | Mlk Foods vs. Ultimate Games SA | Mlk Foods vs. PZ Cormay SA |
| CFI Holding vs. Quantum Software SA | CFI Holding vs. LSI Software SA | CFI Holding vs. Monnari Trade SA | CFI Holding vs. Santander Bank Polska |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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