Correlation Between CD Projekt and Alpha Esports
Can any of the company-specific risk be diversified away by investing in both CD Projekt and Alpha Esports 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 CD Projekt and Alpha Esports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CD Projekt SA and Alpha Esports Tech, you can compare the effects of market volatilities on CD Projekt and Alpha Esports 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 CD Projekt with a short position of Alpha Esports. Check out your portfolio center. Please also check ongoing floating volatility patterns of CD Projekt and Alpha Esports.
Diversification Opportunities for CD Projekt and Alpha Esports
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OTGLY and Alpha is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CD Projekt SA and Alpha Esports Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Esports Tech and CD Projekt 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 CD Projekt SA are associated (or correlated) with Alpha Esports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Esports Tech has no effect on the direction of CD Projekt i.e., CD Projekt and Alpha Esports go up and down completely randomly.
Pair Corralation between CD Projekt and Alpha Esports
Assuming the 90 days horizon CD Projekt is expected to generate 6.19 times less return on investment than Alpha Esports. But when comparing it to its historical volatility, CD Projekt SA is 5.79 times less risky than Alpha Esports. It trades about 0.05 of its potential returns per unit of risk. Alpha Esports Tech is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.98 in Alpha Esports Tech on August 31, 2024 and sell it today you would lose (0.02) from holding Alpha Esports Tech or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CD Projekt SA vs. Alpha Esports Tech
Performance |
| Timeline |
| CD Projekt SA |
| Alpha Esports Tech |
CD Projekt and Alpha Esports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CD Projekt and Alpha Esports
The main advantage of trading using opposite CD Projekt and Alpha Esports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CD Projekt position performs unexpectedly, Alpha Esports 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 Alpha Esports will offset losses from the drop in Alpha Esports' long position.| CD Projekt vs. Square Enix Holdings | CD Projekt vs. Capcom Co | CD Projekt vs. Sega Sammy Holdings | CD Projekt vs. Square Enix Holdings |
| Alpha Esports vs. CD Projekt SA | Alpha Esports vs. Sega Sammy Holdings | Alpha Esports vs. Playtika Holding Corp | Alpha Esports vs. Square Enix Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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