Correlation Between Vercom SA and CFI Holding
Can any of the company-specific risk be diversified away by investing in both Vercom SA 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 Vercom SA and CFI Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vercom SA and CFI Holding SA, you can compare the effects of market volatilities on Vercom SA 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 Vercom SA with a short position of CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vercom SA and CFI Holding.
Diversification Opportunities for Vercom SA and CFI Holding
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vercom and CFI is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Vercom 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 Vercom SA 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 Vercom 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 Vercom SA i.e., Vercom SA and CFI Holding go up and down completely randomly.
Pair Corralation between Vercom SA and CFI Holding
Assuming the 90 days trading horizon Vercom SA is expected to under-perform the CFI Holding. But the stock apears to be less risky and, when comparing its historical volatility, Vercom SA is 2.74 times less risky than CFI Holding. The stock trades about -0.11 of its potential returns per unit of risk. The CFI Holding SA is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 15.00 in CFI Holding SA on October 21, 2024 and sell it today you would earn a total of 4.00 from holding CFI Holding SA or generate 26.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vercom SA vs. CFI Holding SA
Performance |
| Timeline |
| Vercom SA |
| CFI Holding SA |
Vercom SA and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vercom SA and CFI Holding
The main advantage of trading using opposite Vercom SA and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vercom SA 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.| Vercom SA vs. Banco Santander SA | Vercom SA vs. UniCredit SpA | Vercom SA vs. CEZ as | Vercom SA vs. Polski Koncern Naftowy |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Transaction History View history of all your transactions and understand their impact on performance |