Correlation Between CI Games and UF Games
Can any of the company-specific risk be diversified away by investing in both CI Games and UF Games 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 UF Games 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 UF Games SA, you can compare the effects of market volatilities on CI Games and UF Games 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 UF Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Games and UF Games.
Diversification Opportunities for CI Games and UF Games
Weak diversification
The 3 months correlation between CIG and UFG is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CI Games SA and UF Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UF Games 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 UF Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UF Games SA has no effect on the direction of CI Games i.e., CI Games and UF Games go up and down completely randomly.
Pair Corralation between CI Games and UF Games
Assuming the 90 days trading horizon CI Games is expected to generate 1.17 times less return on investment than UF Games. But when comparing it to its historical volatility, CI Games SA is 1.0 times less risky than UF Games. It trades about 0.57 of its potential returns per unit of risk. UF Games SA is currently generating about 0.66 of returns per unit of risk over similar time horizon. If you would invest 89.00 in UF Games SA on October 26, 2024 and sell it today you would earn a total of 21.00 from holding UF Games SA or generate 23.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 70.59% |
| Values | Daily Returns |
CI Games SA vs. UF Games SA
Performance |
| Timeline |
| CI Games SA |
| UF Games SA |
CI Games and UF Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Games and UF Games
The main advantage of trading using opposite CI Games and UF Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Games position performs unexpectedly, UF Games 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 UF Games will offset losses from the drop in UF Games' long position.| CI Games vs. BNP Paribas Bank | CI Games vs. Quantum Software SA | CI Games vs. Road Studio SA | CI Games vs. Medicofarma Biotech SA |
| UF Games vs. Banco Santander SA | UF Games vs. UniCredit SpA | UF Games vs. CEZ as | UF Games 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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