Correlation Between SOFTWARE MANSION and CFI Holding
Can any of the company-specific risk be diversified away by investing in both SOFTWARE MANSION 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 SOFTWARE MANSION and CFI Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFTWARE MANSION SPOLKA and CFI Holding SA, you can compare the effects of market volatilities on SOFTWARE MANSION 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 SOFTWARE MANSION with a short position of CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFTWARE MANSION and CFI Holding.
Diversification Opportunities for SOFTWARE MANSION and CFI Holding
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SOFTWARE and CFI is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SOFTWARE MANSION SPOLKA 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 SOFTWARE MANSION 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 SOFTWARE MANSION SPOLKA 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 SOFTWARE MANSION i.e., SOFTWARE MANSION and CFI Holding go up and down completely randomly.
Pair Corralation between SOFTWARE MANSION and CFI Holding
Assuming the 90 days trading horizon SOFTWARE MANSION SPOLKA is expected to generate 0.35 times more return on investment than CFI Holding. However, SOFTWARE MANSION SPOLKA is 2.82 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 -0.04 per unit of risk. If you would invest 3,260 in SOFTWARE MANSION SPOLKA on August 31, 2024 and sell it today you would lose (160.00) from holding SOFTWARE MANSION SPOLKA or give up 4.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
SOFTWARE MANSION SPOLKA vs. CFI Holding SA
Performance |
| Timeline |
| SOFTWARE MANSION SPOLKA |
| CFI Holding SA |
SOFTWARE MANSION and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFTWARE MANSION and CFI Holding
The main advantage of trading using opposite SOFTWARE MANSION and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTWARE MANSION 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.| SOFTWARE MANSION vs. Banco Santander SA | SOFTWARE MANSION vs. UniCredit SpA | SOFTWARE MANSION vs. CEZ as | SOFTWARE MANSION vs. Polski Koncern Naftowy |
| CFI Holding vs. Intersport Polska SA | CFI Holding vs. Pyramid Games SA | CFI Holding vs. Live Motion Games | CFI Holding vs. SOFTWARE MANSION SPOLKA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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