Correlation Between CFI Holding and Kogeneracja

Can any of the company-specific risk be diversified away by investing in both CFI Holding and Kogeneracja 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 Kogeneracja 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 Kogeneracja SA, you can compare the effects of market volatilities on CFI Holding and Kogeneracja 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 Kogeneracja. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFI Holding and Kogeneracja.

Diversification Opportunities for CFI Holding and Kogeneracja

0.37

Correlation Coefficient

CFI Holding  Kogeneracja

Weak diversification

The 3 months correlation between CFI and Kogeneracja is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and Kogeneracja SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kogeneracja SA 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 Kogeneracja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kogeneracja SA has no effect on the direction of CFI Holding i.e., CFI Holding and Kogeneracja go up and down completely randomly.

Pair Corralation between CFI Holding and Kogeneracja

Assuming the 90 days trading horizon CFI Holding SA is expected to under-perform the Kogeneracja. In addition to that, CFI Holding is 1.96 times more volatile than Kogeneracja SA. It trades about -0.03 of its total potential returns per unit of risk. Kogeneracja SA is currently generating about -0.01 per unit of volatility. If you would invest  5,370  in Kogeneracja SA on September 12, 2024 and sell it today you would lose (180.00) from holding Kogeneracja SA or give up 3.35% of portfolio value over 90 days.

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

CFI Holding SA  vs.  Kogeneracja SA

CFI Holding SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CFI Holding SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Kogeneracja SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kogeneracja SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Kogeneracja is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with CFI Holding and Kogeneracja

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

The idea behind CFI Holding SA and Kogeneracja SA 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.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.