Correlation Between Gobarto SA and CFI Holding

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

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

Diversification Opportunities for Gobarto SA and CFI Holding

0.43

Correlation Coefficient

Gobarto SA  CFI Holding

Very weak diversification

The 3 months correlation between Gobarto and CFI is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gobarto SA and CFI Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CFI Holding SA and Gobarto SA 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 Gobarto SA are associated (or correlated) with CFI Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CFI Holding SA has no effect on the direction of Gobarto SA i.e., Gobarto SA and CFI Holding go up and down completely randomly.

Pair Corralation between Gobarto SA and CFI Holding

Assuming the 90 days trading horizon Gobarto SA is expected to under-perform the CFI Holding. But the stock apears to be less risky and, when comparing its historical volatility, Gobarto SA is 1.12 times less risky than CFI Holding. The stock trades about -0.03 of its potential returns per unit of risk. The CFI Holding SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  18.00  in CFI Holding SA on December 30, 2024 and sell it today you would lose (1.00) from holding CFI Holding SA or give up 5.56% of portfolio value over 90 days.

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

Gobarto SA  vs.  CFI Holding SA

Gobarto SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gobarto 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.

CFI Holding SA

Risk-Adjusted Performance

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 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.

Pair Trading with Gobarto SA and CFI Holding

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

The idea behind Gobarto SA and CFI Holding 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.