Correlation Between SMI and CFG BANK
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By analyzing existing cross correlation between SMI and CFG BANK, you can compare the effects of market volatilities on SMI and CFG BANK 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 SMI with a short position of CFG BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMI and CFG BANK.
Diversification Opportunities for SMI and CFG BANK
Poor diversification
The 3 months correlation between SMI and CFG is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding SMI and CFG BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CFG BANK and SMI 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 SMI are associated (or correlated) with CFG BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CFG BANK has no effect on the direction of SMI i.e., SMI and CFG BANK go up and down completely randomly.
Pair Corralation between SMI and CFG BANK
Assuming the 90 days trading horizon SMI is expected to generate 2.14 times less return on investment than CFG BANK. In addition to that, SMI is 1.49 times more volatile than CFG BANK. It trades about 0.05 of its total potential returns per unit of risk. CFG BANK is currently generating about 0.15 per unit of volatility. If you would invest 12,095 in CFG BANK on December 1, 2024 and sell it today you would earn a total of 11,605 from holding CFG BANK or generate 95.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 60.7% |
| Values | Daily Returns |
SMI vs. CFG BANK
Performance |
| Timeline |
| SMI |
| CFG BANK |
SMI and CFG BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMI and CFG BANK
The main advantage of trading using opposite SMI and CFG BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMI position performs unexpectedly, CFG BANK 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 CFG BANK will offset losses from the drop in CFG BANK's long position.The idea behind SMI and CFG BANK pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CFG BANK vs. CREDIT IMMOBILIER ET | ||
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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