Correlation Between CI GAMES and Vale SA
Can any of the company-specific risk be diversified away by investing in both CI GAMES and Vale SA 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 CI GAMES and Vale SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI GAMES SA and Vale SA, you can compare the effects of market volatilities on CI GAMES and Vale SA 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 CI GAMES with a short position of Vale SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI GAMES and Vale SA.
Diversification Opportunities for CI GAMES and Vale SA
Weak diversification
The 3 months correlation between CI7 and Vale is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding CI GAMES SA and Vale SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vale SA and CI GAMES 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 CI GAMES SA are associated (or correlated) with Vale SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vale SA has no effect on the direction of CI GAMES i.e., CI GAMES and Vale SA go up and down completely randomly.
Pair Corralation between CI GAMES and Vale SA
Assuming the 90 days horizon CI GAMES is expected to generate 2.72 times less return on investment than Vale SA. In addition to that, CI GAMES is 2.29 times more volatile than Vale SA. It trades about 0.01 of its total potential returns per unit of risk. Vale SA is currently generating about 0.04 per unit of volatility. If you would invest 643.00 in Vale SA on September 2, 2024 and sell it today you would earn a total of 309.00 from holding Vale SA or generate 48.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI GAMES SA vs. Vale SA
Performance |
| Timeline |
| CI GAMES SA |
| Vale SA |
CI GAMES and Vale SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI GAMES and Vale SA
The main advantage of trading using opposite CI GAMES and Vale SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI GAMES position performs unexpectedly, Vale SA 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 Vale SA will offset losses from the drop in Vale SA's long position.| CI GAMES vs. Nintendo Co | CI GAMES vs. Sea Limited | CI GAMES vs. Superior Plus Corp | CI GAMES vs. NMI Holdings |
| Vale SA vs. QURATE RETAIL INC | Vale SA vs. HOCHSCHILD MINING | Vale SA vs. Retail Estates NV | Vale SA vs. Boyd Gaming |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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