Correlation Between CPI Computer and Marfin Investment

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

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

Diversification Opportunities for CPI Computer and Marfin Investment

0.79

Correlation Coefficient

CPI Computer  Marfin Investment

Poor diversification

The 3 months correlation between CPI and Marfin is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding CPI Computer Peripherals and Marfin Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfin Investment and CPI Computer 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 CPI Computer Peripherals are associated (or correlated) with Marfin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfin Investment has no effect on the direction of CPI Computer i.e., CPI Computer and Marfin Investment go up and down completely randomly.

Pair Corralation between CPI Computer and Marfin Investment

Assuming the 90 days trading horizon CPI Computer Peripherals is expected to generate 1.1 times more return on investment than Marfin Investment. However, CPI Computer is 1.1 times more volatile than Marfin Investment Group. It trades about -0.1 of its potential returns per unit of risk. Marfin Investment Group is currently generating about -0.12 per unit of risk. If you would invest  61.00  in CPI Computer Peripherals on September 13, 2024 and sell it today you would lose (9.00) from holding CPI Computer Peripherals or give up 14.75% of portfolio value over 90 days.

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

CPI Computer Peripherals  vs.  Marfin Investment Group

CPI Computer Peripherals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CPI Computer Peripherals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CPI Computer and Marfin Investment

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

The idea behind CPI Computer Peripherals and Marfin Investment Group 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 CEOs Directory module to screen CEOs from public companies around the world.