Correlation Between CI Games and KCI SA
Can any of the company-specific risk be diversified away by investing in both CI Games and KCI 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 KCI 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 KCI SA, you can compare the effects of market volatilities on CI Games and KCI 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 KCI SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Games and KCI SA.
Diversification Opportunities for CI Games and KCI SA
Significant diversification
The 3 months correlation between CIG and KCI is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding CI Games SA and KCI SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCI 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 KCI SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCI SA has no effect on the direction of CI Games i.e., CI Games and KCI SA go up and down completely randomly.
Pair Corralation between CI Games and KCI SA
Assuming the 90 days trading horizon CI Games SA is expected to under-perform the KCI SA. But the stock apears to be less risky and, when comparing its historical volatility, CI Games SA is 1.08 times less risky than KCI SA. The stock trades about -0.33 of its potential returns per unit of risk. The KCI SA is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 80.00 in KCI SA on September 4, 2024 and sell it today you would lose (2.00) from holding KCI SA or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
CI Games SA vs. KCI SA
Performance |
| Timeline |
| CI Games SA |
| KCI SA |
CI Games and KCI SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Games and KCI SA
The main advantage of trading using opposite CI Games and KCI SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Games position performs unexpectedly, KCI 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 KCI SA will offset losses from the drop in KCI SA's long position.| CI Games vs. Centrum Finansowe Banku | CI Games vs. BNP Paribas Bank | CI Games vs. Movie Games SA | CI Games vs. Pyramid Games SA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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