Correlation Between Polski Koncern and CFI Holding
Can any of the company-specific risk be diversified away by investing in both Polski Koncern 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 Polski Koncern and CFI Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polski Koncern Naftowy and CFI Holding SA, you can compare the effects of market volatilities on Polski Koncern 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 Polski Koncern with a short position of CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polski Koncern and CFI Holding.
Diversification Opportunities for Polski Koncern and CFI Holding
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Polski and CFI is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy 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 Polski Koncern 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 Polski Koncern Naftowy 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 Polski Koncern i.e., Polski Koncern and CFI Holding go up and down completely randomly.
Pair Corralation between Polski Koncern and CFI Holding
Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to under-perform the CFI Holding. But the stock apears to be less risky and, when comparing its historical volatility, Polski Koncern Naftowy is 3.35 times less risky than CFI Holding. The stock trades about -0.07 of its potential returns per unit of risk. The CFI Holding SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 20.00 in CFI Holding SA on August 28, 2024 and sell it today you would lose (1.00) from holding CFI Holding SA or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polski Koncern Naftowy vs. CFI Holding SA
Performance |
| Timeline |
| Polski Koncern Naftowy |
| CFI Holding SA |
Polski Koncern and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polski Koncern and CFI Holding
The main advantage of trading using opposite Polski Koncern and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polski Koncern 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.| Polski Koncern vs. Asseco Business Solutions | Polski Koncern vs. Detalion Games SA | Polski Koncern vs. Asseco South Eastern | Polski Koncern vs. Movie Games SA |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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