Correlation Between True Games and CFI Holding
Can any of the company-specific risk be diversified away by investing in both True Games 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 True Games and CFI Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between True Games Syndicate and CFI Holding SA, you can compare the effects of market volatilities on True Games 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 True Games with a short position of CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of True Games and CFI Holding.
Diversification Opportunities for True Games and CFI Holding
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between True and CFI is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding True Games Syndicate 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 True Games 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 True Games Syndicate 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 True Games i.e., True Games and CFI Holding go up and down completely randomly.
Pair Corralation between True Games and CFI Holding
Assuming the 90 days trading horizon True Games Syndicate is expected to under-perform the CFI Holding. But the stock apears to be less risky and, when comparing its historical volatility, True Games Syndicate is 2.13 times less risky than CFI Holding. The stock trades about -0.12 of its potential returns per unit of risk. The CFI Holding SA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 16.00 in CFI Holding SA on October 20, 2024 and sell it today you would earn a total of 3.00 from holding CFI Holding SA or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 81.25% |
| Values | Daily Returns |
True Games Syndicate vs. CFI Holding SA
Performance |
| Timeline |
| True Games Syndicate |
| CFI Holding SA |
True Games and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with True Games and CFI Holding
The main advantage of trading using opposite True Games and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if True Games 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.| True Games vs. PZ Cormay SA | True Games vs. Creotech Instruments SA | True Games vs. CI Games SA | True Games vs. New Tech Venture |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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