Correlation Between CREDIT IMMOBILIER and CFG BANK

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

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

Diversification Opportunities for CREDIT IMMOBILIER and CFG BANK

0.7

Correlation Coefficient

CREDIT IMMOBILIER  CFG BANK

Poor diversification

The 3 months correlation between CREDIT and CFG is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding CREDIT IMMOBILIER ET and CFG BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CFG BANK and CREDIT IMMOBILIER 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 CREDIT IMMOBILIER ET 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 CREDIT IMMOBILIER i.e., CREDIT IMMOBILIER and CFG BANK go up and down completely randomly.

Pair Corralation between CREDIT IMMOBILIER and CFG BANK

Assuming the 90 days trading horizon CREDIT IMMOBILIER ET is expected to generate 1.36 times more return on investment than CFG BANK. However, CREDIT IMMOBILIER is 1.36 times more volatile than CFG BANK. It trades about 0.04 of its potential returns per unit of risk. CFG BANK is currently generating about 0.04 per unit of risk. If you would invest  39,600  in CREDIT IMMOBILIER ET on December 30, 2024 and sell it today you would earn a total of  1,400  from holding CREDIT IMMOBILIER ET or generate 3.54% return on investment over 90 days.

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

CREDIT IMMOBILIER ET  vs.  CFG BANK

CREDIT IMMOBILIER

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CREDIT IMMOBILIER ET are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, CREDIT IMMOBILIER is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

CFG BANK

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CFG BANK are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, CFG BANK is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CREDIT IMMOBILIER and CFG BANK

The main advantage of trading using opposite CREDIT IMMOBILIER and CFG BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREDIT IMMOBILIER 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 CREDIT IMMOBILIER ET 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.