Correlation Between CFI Holding and Medicalg

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

Diversification Opportunities for CFI Holding and Medicalg

0.32

Correlation Coefficient

CFI Holding  Medicalg

Weak diversification

The 3 months correlation between CFI and Medicalg is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding CFI Holding SA and Medicalg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicalg 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 Medicalg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicalg has no effect on the direction of CFI Holding i.e., CFI Holding and Medicalg go up and down completely randomly.

Pair Corralation between CFI Holding and Medicalg

Assuming the 90 days trading horizon CFI Holding SA is expected to generate 1.22 times more return on investment than Medicalg. However, CFI Holding is 1.22 times more volatile than Medicalg. It trades about -0.03 of its potential returns per unit of risk. Medicalg is currently generating about -0.09 per unit of risk. If you would invest  21.00  in CFI Holding SA on September 3, 2024 and sell it today you would lose (3.00) from holding CFI Holding SA or give up 14.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

CFI Holding SA  vs.  Medicalg

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.

Medicalg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medicalg has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with CFI Holding and Medicalg

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

The idea behind CFI Holding SA and Medicalg 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.