Correlation Between CI Games and Salesforce
Can any of the company-specific risk be diversified away by investing in both CI Games and Salesforce 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 Salesforce 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 PZ Cormay SA, you can compare the effects of market volatilities on CI Games and Salesforce 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 Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Games and Salesforce.
Diversification Opportunities for CI Games and Salesforce
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CIG and Salesforce is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CI Games SA and PZ Cormay SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PZ Cormay 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 Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PZ Cormay SA has no effect on the direction of CI Games i.e., CI Games and Salesforce go up and down completely randomly.
Pair Corralation between CI Games and Salesforce
Assuming the 90 days trading horizon CI Games SA is expected to generate 1.55 times more return on investment than Salesforce. However, CI Games is 1.55 times more volatile than PZ Cormay SA. It trades about -0.02 of its potential returns per unit of risk. PZ Cormay SA is currently generating about -0.08 per unit of risk. If you would invest 180.00 in CI Games SA on August 28, 2024 and sell it today you would lose (32.00) from holding CI Games SA or give up 17.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Games SA vs. PZ Cormay SA
Performance |
| Timeline |
| CI Games SA |
| PZ Cormay SA |
CI Games and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Games and Salesforce
The main advantage of trading using opposite CI Games and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Games position performs unexpectedly, Salesforce 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 Salesforce will offset losses from the drop in Salesforce's long position.The idea behind CI Games SA and PZ Cormay SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Salesforce vs. Banco Santander SA | Salesforce vs. UniCredit SpA | Salesforce vs. CEZ as | Salesforce vs. Polski Koncern Naftowy |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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