Correlation Between Sea and CI GAMES
Can any of the company-specific risk be diversified away by investing in both Sea and CI GAMES 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 Sea and CI GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea Limited and CI GAMES SA, you can compare the effects of market volatilities on Sea and CI GAMES 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 Sea with a short position of CI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and CI GAMES.
Diversification Opportunities for Sea and CI GAMES
Poor diversification
The 3 months correlation between Sea and CI7 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sea Limited and CI GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI GAMES SA and Sea 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 Sea Limited are associated (or correlated) with CI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI GAMES SA has no effect on the direction of Sea i.e., Sea and CI GAMES go up and down completely randomly.
Pair Corralation between Sea and CI GAMES
Assuming the 90 days horizon Sea Limited is expected to under-perform the CI GAMES. In addition to that, Sea is 1.91 times more volatile than CI GAMES SA. It trades about -0.19 of its total potential returns per unit of risk. CI GAMES SA is currently generating about 0.01 per unit of volatility. If you would invest 36.00 in CI GAMES SA on January 7, 2025 and sell it today you would earn a total of 0.00 from holding CI GAMES SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea Limited vs. CI GAMES SA
Performance |
| Timeline |
| Sea Limited |
| CI GAMES SA |
Sea and CI GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea and CI GAMES
The main advantage of trading using opposite Sea and CI GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea position performs unexpectedly, CI GAMES 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 CI GAMES will offset losses from the drop in CI GAMES's long position.| Sea vs. GRIFFIN MINING LTD | Sea vs. Kingdee International Software | Sea vs. FIREWEED METALS P | Sea vs. DISTRICT METALS |
| CI GAMES vs. Compagnie Plastic Omnium | CI GAMES vs. GAMES OPERATORS SA | CI GAMES vs. Hyster Yale Materials Handling | CI GAMES vs. FUTURE GAMING GRP |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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