Correlation Between ATTIJARIWAFA BANK and CFG BANK

Can any of the company-specific risk be diversified away by investing in both ATTIJARIWAFA BANK and CFG BANK 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 ATTIJARIWAFA BANK and CFG BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATTIJARIWAFA BANK and CFG BANK, you can compare the effects of market volatilities on ATTIJARIWAFA BANK 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 ATTIJARIWAFA BANK with a short position of CFG BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATTIJARIWAFA BANK and CFG BANK.

Diversification Opportunities for ATTIJARIWAFA BANK and CFG BANK

0.9

Correlation Coefficient

ATTIJARIWAFA BANK  CFG BANK

Almost no diversification

The 3 months correlation between ATTIJARIWAFA and CFG is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding ATTIJARIWAFA BANK and CFG BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CFG BANK and ATTIJARIWAFA BANK 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 ATTIJARIWAFA BANK 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 ATTIJARIWAFA BANK i.e., ATTIJARIWAFA BANK and CFG BANK go up and down completely randomly.

Pair Corralation between ATTIJARIWAFA BANK and CFG BANK

Assuming the 90 days trading horizon ATTIJARIWAFA BANK is expected to generate 1.2 times less return on investment than CFG BANK. In addition to that, ATTIJARIWAFA BANK is 1.12 times more volatile than CFG BANK. It trades about 0.15 of its total potential returns per unit of risk. CFG BANK is currently generating about 0.21 per unit of volatility. If you would invest  20,510  in CFG BANK on December 4, 2024 and sell it today you would earn a total of  3,485  from holding CFG BANK or generate 16.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

ATTIJARIWAFA BANK  vs.  CFG BANK

ATTIJARIWAFA BANK

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATTIJARIWAFA BANK are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting fundamental drivers, ATTIJARIWAFA BANK reported solid returns over the last few months and may actually be approaching a breakup point.

CFG BANK

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CFG BANK are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental drivers, CFG BANK displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATTIJARIWAFA BANK and CFG BANK

The main advantage of trading using opposite ATTIJARIWAFA BANK and CFG BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATTIJARIWAFA BANK 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 ATTIJARIWAFA BANK 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.