Correlation Between Marfin Investment and CPI Computer

Can any of the company-specific risk be diversified away by investing in both Marfin Investment and CPI Computer 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 Marfin Investment and CPI Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marfin Investment Group and CPI Computer Peripherals, you can compare the effects of market volatilities on Marfin Investment and CPI Computer 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 Marfin Investment with a short position of CPI Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfin Investment and CPI Computer.

Diversification Opportunities for Marfin Investment and CPI Computer

0.68

Correlation Coefficient

Marfin Investment  CPI Computer

Poor diversification

The 3 months correlation between Marfin and CPI is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Marfin Investment Group and CPI Computer Peripherals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPI Computer Peripherals and Marfin Investment 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 Marfin Investment Group are associated (or correlated) with CPI Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPI Computer Peripherals has no effect on the direction of Marfin Investment i.e., Marfin Investment and CPI Computer go up and down completely randomly.

Pair Corralation between Marfin Investment and CPI Computer

Assuming the 90 days trading horizon Marfin Investment Group is expected to generate 1.56 times more return on investment than CPI Computer. However, Marfin Investment is 1.56 times more volatile than CPI Computer Peripherals. It trades about 0.06 of its potential returns per unit of risk. CPI Computer Peripherals is currently generating about 0.02 per unit of risk. If you would invest  126.00  in Marfin Investment Group on October 10, 2024 and sell it today you would earn a total of  170.00  from holding Marfin Investment Group or generate 134.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.97%
Values	Daily Returns

Marfin Investment Group  vs.  CPI Computer Peripherals

Marfin Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marfin Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

CPI Computer Peripherals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CPI Computer Peripherals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, CPI Computer may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Marfin Investment and CPI Computer

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

The idea behind Marfin Investment Group and CPI Computer Peripherals 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.