Correlation Between CIFI Holdings and DEUTSCHE WOHNEN

Can any of the company-specific risk be diversified away by investing in both CIFI Holdings and DEUTSCHE WOHNEN 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 CIFI Holdings and DEUTSCHE WOHNEN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CIFI Holdings Co and DEUTSCHE WOHNEN ADRS12, you can compare the effects of market volatilities on CIFI Holdings and DEUTSCHE WOHNEN 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 CIFI Holdings with a short position of DEUTSCHE WOHNEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIFI Holdings and DEUTSCHE WOHNEN.

Diversification Opportunities for CIFI Holdings and DEUTSCHE WOHNEN

0.32

Correlation Coefficient

CIFI Holdings  DEUTSCHE WOHNEN

Weak diversification

The 3 months correlation between CIFI and DEUTSCHE is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding CIFI Holdings Co and DEUTSCHE WOHNEN ADRS12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEUTSCHE WOHNEN ADRS12 and CIFI Holdings 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 CIFI Holdings Co are associated (or correlated) with DEUTSCHE WOHNEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEUTSCHE WOHNEN ADRS12 has no effect on the direction of CIFI Holdings i.e., CIFI Holdings and DEUTSCHE WOHNEN go up and down completely randomly.

Pair Corralation between CIFI Holdings and DEUTSCHE WOHNEN

Assuming the 90 days horizon CIFI Holdings Co is expected to generate 4.19 times more return on investment than DEUTSCHE WOHNEN. However, CIFI Holdings is 4.19 times more volatile than DEUTSCHE WOHNEN ADRS12. It trades about 0.08 of its potential returns per unit of risk. DEUTSCHE WOHNEN ADRS12 is currently generating about 0.05 per unit of risk. If you would invest  1.90  in CIFI Holdings Co on April 24, 2025 and sell it today you would earn a total of  0.40  from holding CIFI Holdings Co or generate 21.05% return on investment over 90 days.

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

CIFI Holdings Co  vs.  DEUTSCHE WOHNEN ADRS12

CIFI Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CIFI Holdings Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CIFI Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

DEUTSCHE WOHNEN ADRS12

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DEUTSCHE WOHNEN ADRS12 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DEUTSCHE WOHNEN may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with CIFI Holdings and DEUTSCHE WOHNEN

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

The idea behind CIFI Holdings Co and DEUTSCHE WOHNEN ADRS12 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.