Correlation Between CI GAMES and Universal Entertainment
Can any of the company-specific risk be diversified away by investing in both CI GAMES and Universal Entertainment 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 Universal Entertainment 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 Universal Entertainment, you can compare the effects of market volatilities on CI GAMES and Universal Entertainment 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 Universal Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI GAMES and Universal Entertainment.
Diversification Opportunities for CI GAMES and Universal Entertainment
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CI7 and Universal is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CI GAMES SA and Universal Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Entertainment 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 Universal Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Entertainment has no effect on the direction of CI GAMES i.e., CI GAMES and Universal Entertainment go up and down completely randomly.
Pair Corralation between CI GAMES and Universal Entertainment
Assuming the 90 days horizon CI GAMES SA is expected to generate 0.66 times more return on investment than Universal Entertainment. However, CI GAMES SA is 1.51 times less risky than Universal Entertainment. It trades about -0.02 of its potential returns per unit of risk. Universal Entertainment is currently generating about -0.11 per unit of risk. If you would invest 34.00 in CI GAMES SA on September 4, 2024 and sell it today you would lose (1.00) from holding CI GAMES SA or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI GAMES SA vs. Universal Entertainment
Performance |
| Timeline |
| CI GAMES SA |
| Universal Entertainment |
CI GAMES and Universal Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI GAMES and Universal Entertainment
The main advantage of trading using opposite CI GAMES and Universal Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI GAMES position performs unexpectedly, Universal Entertainment 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 Universal Entertainment will offset losses from the drop in Universal Entertainment's long position.| CI GAMES vs. CDN IMPERIAL BANK | CI GAMES vs. VIRG NATL BANKSH | CI GAMES vs. ADRIATIC METALS LS 013355 | CI GAMES vs. GREENX METALS LTD |
| Universal Entertainment vs. TOTAL GABON | Universal Entertainment vs. Walgreens Boots Alliance | Universal Entertainment vs. Peak Resources Limited |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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