Correlation Between Capcom Co and CD Projekt
Can any of the company-specific risk be diversified away by investing in both Capcom Co and CD Projekt 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 Capcom Co and CD Projekt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capcom Co and CD Projekt SA, you can compare the effects of market volatilities on Capcom Co and CD Projekt 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 Capcom Co with a short position of CD Projekt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capcom Co and CD Projekt.
Diversification Opportunities for Capcom Co and CD Projekt
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Capcom and OTGLY is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Capcom Co and CD Projekt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CD Projekt SA and Capcom Co 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 Capcom Co are associated (or correlated) with CD Projekt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CD Projekt SA has no effect on the direction of Capcom Co i.e., Capcom Co and CD Projekt go up and down completely randomly.
Pair Corralation between Capcom Co and CD Projekt
Assuming the 90 days horizon Capcom Co is expected to generate 1.49 times more return on investment than CD Projekt. However, Capcom Co is 1.49 times more volatile than CD Projekt SA. It trades about 0.07 of its potential returns per unit of risk. CD Projekt SA is currently generating about 0.08 per unit of risk. If you would invest 1,670 in Capcom Co on August 28, 2024 and sell it today you would earn a total of 384.00 from holding Capcom Co or generate 22.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Capcom Co vs. CD Projekt SA
Performance |
| Timeline |
| Capcom Co |
| CD Projekt SA |
Capcom Co and CD Projekt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capcom Co and CD Projekt
The main advantage of trading using opposite Capcom Co and CD Projekt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capcom Co position performs unexpectedly, CD Projekt 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 CD Projekt will offset losses from the drop in CD Projekt's long position.| Capcom Co vs. Square Enix Holdings | Capcom Co vs. CD Projekt SA | Capcom Co vs. Sega Sammy Holdings | Capcom Co vs. Square Enix Holdings |
| CD Projekt vs. Square Enix Holdings | CD Projekt vs. Capcom Co | CD Projekt vs. Sega Sammy Holdings | CD Projekt vs. Square Enix Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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