Correlation Between CD PROJEKT and New Tech
Can any of the company-specific risk be diversified away by investing in both CD PROJEKT and New Tech 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 CD PROJEKT and New Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CD PROJEKT SA and New Tech Capital, you can compare the effects of market volatilities on CD PROJEKT and New Tech 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 CD PROJEKT with a short position of New Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of CD PROJEKT and New Tech.
Diversification Opportunities for CD PROJEKT and New Tech
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CDR and New is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding CD PROJEKT SA and New Tech Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Tech Capital and CD PROJEKT 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 CD PROJEKT SA are associated (or correlated) with New Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Tech Capital has no effect on the direction of CD PROJEKT i.e., CD PROJEKT and New Tech go up and down completely randomly.
Pair Corralation between CD PROJEKT and New Tech
Assuming the 90 days trading horizon CD PROJEKT SA is expected to generate 0.43 times more return on investment than New Tech. However, CD PROJEKT SA is 2.3 times less risky than New Tech. It trades about 0.09 of its potential returns per unit of risk. New Tech Capital is currently generating about -0.13 per unit of risk. If you would invest 17,635 in CD PROJEKT SA on November 2, 2024 and sell it today you would earn a total of 3,465 from holding CD PROJEKT SA or generate 19.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.01% |
| Values | Daily Returns |
CD PROJEKT SA vs. New Tech Capital
Performance |
| Timeline |
| CD PROJEKT SA |
| New Tech Capital |
CD PROJEKT and New Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CD PROJEKT and New Tech
The main advantage of trading using opposite CD PROJEKT and New Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CD PROJEKT position performs unexpectedly, New Tech 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 New Tech will offset losses from the drop in New Tech's long position.| CD PROJEKT vs. Skyline Investment SA | CD PROJEKT vs. SOFTWARE MANSION SPOLKA | CD PROJEKT vs. Quantum Software SA | CD PROJEKT vs. Santander Bank Polska |
| New Tech vs. GreenX Metals | New Tech vs. CI Games SA | New Tech vs. M Food SA | New Tech vs. X Trade Brokers |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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