Correlation Between Skyline Investment and CFI Holding
Can any of the company-specific risk be diversified away by investing in both Skyline Investment 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 Skyline Investment and CFI Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skyline Investment SA and CFI Holding SA, you can compare the effects of market volatilities on Skyline Investment 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 Skyline Investment with a short position of CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skyline Investment and CFI Holding.
Diversification Opportunities for Skyline Investment and CFI Holding
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Skyline and CFI is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Skyline Investment 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 Skyline Investment 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 Skyline Investment 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 Skyline Investment i.e., Skyline Investment and CFI Holding go up and down completely randomly.
Pair Corralation between Skyline Investment and CFI Holding
Assuming the 90 days trading horizon Skyline Investment SA is expected to generate 0.34 times more return on investment than CFI Holding. However, Skyline Investment SA is 2.95 times less risky than CFI Holding. It trades about 0.1 of its potential returns per unit of risk. CFI Holding SA is currently generating about 0.02 per unit of risk. If you would invest 157.00 in Skyline Investment SA on November 1, 2024 and sell it today you would earn a total of 4.00 from holding Skyline Investment SA or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skyline Investment SA vs. CFI Holding SA
Performance |
| Timeline |
| Skyline Investment |
| CFI Holding SA |
Skyline Investment and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skyline Investment and CFI Holding
The main advantage of trading using opposite Skyline Investment and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skyline Investment 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.| Skyline Investment vs. Quantum Software SA | Skyline Investment vs. Marie Brizard Wine | Skyline Investment vs. Echo Investment SA | Skyline Investment vs. M Food SA |
| CFI Holding vs. Skyline Investment SA | CFI Holding vs. True Games Syndicate | CFI Holding vs. Investment Friends Capital | CFI Holding vs. TEN SQUARE GAMES |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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