Correlation Between CI GAMES and CARSALESCOM
Can any of the company-specific risk be diversified away by investing in both CI GAMES and CARSALESCOM 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 CARSALESCOM 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 CARSALESCOM, you can compare the effects of market volatilities on CI GAMES and CARSALESCOM 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 CARSALESCOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI GAMES and CARSALESCOM.
Diversification Opportunities for CI GAMES and CARSALESCOM
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CI7 and CARSALESCOM is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding CI GAMES SA and CARSALESCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARSALESCOM 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 CARSALESCOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARSALESCOM has no effect on the direction of CI GAMES i.e., CI GAMES and CARSALESCOM go up and down completely randomly.
Pair Corralation between CI GAMES and CARSALESCOM
Assuming the 90 days horizon CI GAMES SA is expected to generate 1.45 times more return on investment than CARSALESCOM. However, CI GAMES is 1.45 times more volatile than CARSALESCOM. It trades about 0.06 of its potential returns per unit of risk. CARSALESCOM is currently generating about -0.17 per unit of risk. If you would invest 37.00 in CI GAMES SA on November 29, 2024 and sell it today you would earn a total of 1.00 from holding CI GAMES SA or generate 2.7% 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. CARSALESCOM
Performance |
| Timeline |
| CI GAMES SA |
| CARSALESCOM |
CI GAMES and CARSALESCOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI GAMES and CARSALESCOM
The main advantage of trading using opposite CI GAMES and CARSALESCOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI GAMES position performs unexpectedly, CARSALESCOM 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 CARSALESCOM will offset losses from the drop in CARSALESCOM's long position.| CI GAMES vs. Nintendo Co | CI GAMES vs. Nintendo Co | CI GAMES vs. Sea Limited | CI GAMES vs. Electronic Arts |
| CARSALESCOM vs. Firan Technology Group | CARSALESCOM vs. Micron Technology | CARSALESCOM vs. Casio Computer CoLtd | CARSALESCOM vs. Kingdee International Software |
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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