Correlation Between NGG and CFI Holding
Can any of the company-specific risk be diversified away by investing in both NGG 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 NGG and CFI Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NGG and CFI Holding SA, you can compare the effects of market volatilities on NGG 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 NGG with a short position of CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGG and CFI Holding.
Diversification Opportunities for NGG and CFI Holding
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NGG and CFI is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding NGG 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 NGG 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 NGG 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 NGG i.e., NGG and CFI Holding go up and down completely randomly.
Pair Corralation between NGG and CFI Holding
Assuming the 90 days trading horizon NGG is expected to generate 0.73 times more return on investment than CFI Holding. However, NGG is 1.36 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 -0.08 per unit of risk. If you would invest 3.26 in NGG on September 2, 2024 and sell it today you would earn a total of 0.12 from holding NGG or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
NGG vs. CFI Holding SA
Performance |
| Timeline |
| NGG |
| CFI Holding SA |
NGG and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NGG and CFI Holding
The main advantage of trading using opposite NGG and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NGG 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.| NGG vs. Asseco Business Solutions | NGG vs. Detalion Games SA | NGG vs. Asseco South Eastern | NGG vs. CFI Holding SA |
| CFI Holding vs. CI Games SA | CFI Holding vs. SOFTWARE MANSION SPOLKA | CFI Holding vs. BNP Paribas Bank | CFI Holding vs. Varsav Game Studios |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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