Correlation Between CFI Holding and Asseco South

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

By analyzing existing cross correlation between CFI Holding SA and Asseco South Eastern, you can compare the effects of market volatilities on CFI Holding and Asseco South 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 CFI Holding with a short position of Asseco South. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFI Holding and Asseco South.

Diversification Opportunities for CFI Holding and Asseco South

-0.26

Correlation Coefficient

CFI Holding  Asseco South

Very good diversification

The 3 months correlation between CFI and Asseco is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and Asseco South Eastern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asseco South Eastern and CFI Holding 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 CFI Holding SA are associated (or correlated) with Asseco South. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asseco South Eastern has no effect on the direction of CFI Holding i.e., CFI Holding and Asseco South go up and down completely randomly.

Pair Corralation between CFI Holding and Asseco South

Assuming the 90 days trading horizon CFI Holding is expected to generate 1.23 times less return on investment than Asseco South. In addition to that, CFI Holding is 3.45 times more volatile than Asseco South Eastern. It trades about 0.02 of its total potential returns per unit of risk. Asseco South Eastern is currently generating about 0.09 per unit of volatility. If you would invest  4,870  in Asseco South Eastern on November 29, 2024 and sell it today you would earn a total of  330.00  from holding Asseco South Eastern or generate 6.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

CFI Holding SA  vs.  Asseco South Eastern

CFI Holding SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CFI Holding SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, CFI Holding is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Asseco South Eastern

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asseco South Eastern are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Asseco South may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with CFI Holding and Asseco South

The main advantage of trading using opposite CFI Holding and Asseco South positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFI Holding position performs unexpectedly, Asseco South 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 Asseco South will offset losses from the drop in Asseco South's long position.

The idea behind CFI Holding SA and Asseco South Eastern 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..