Correlation Between UniCredit SpA and CFI Holding
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA 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 UniCredit SpA and CFI Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and CFI Holding SA, you can compare the effects of market volatilities on UniCredit SpA 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 UniCredit SpA with a short position of CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and CFI Holding.
Diversification Opportunities for UniCredit SpA and CFI Holding
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UniCredit and CFI is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA 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 UniCredit SpA 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 UniCredit SpA 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 UniCredit SpA i.e., UniCredit SpA and CFI Holding go up and down completely randomly.
Pair Corralation between UniCredit SpA and CFI Holding
Assuming the 90 days trading horizon UniCredit SpA is expected to generate 0.39 times more return on investment than CFI Holding. However, UniCredit SpA is 2.56 times less risky than CFI Holding. It trades about -0.05 of its potential returns per unit of risk. CFI Holding SA is currently generating about -0.1 per unit of risk. If you would invest 16,810 in UniCredit SpA on August 25, 2024 and sell it today you would lose (430.00) from holding UniCredit SpA or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
UniCredit SpA vs. CFI Holding SA
Performance |
| Timeline |
| UniCredit SpA |
| CFI Holding SA |
UniCredit SpA and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and CFI Holding
The main advantage of trading using opposite UniCredit SpA and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA 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.| UniCredit SpA vs. Santander Bank Polska | UniCredit SpA vs. ING Bank lski | UniCredit SpA vs. Bank Handlowy w |
| CFI Holding vs. Carlson Investments SA | CFI Holding vs. GreenX Metals | CFI Holding vs. Globe Trade Centre | CFI Holding vs. Marie Brizard Wine |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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