Correlation Between CD Projekt and GameOn Entertainment
Can any of the company-specific risk be diversified away by investing in both CD Projekt and GameOn Entertainment 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 GameOn Entertainment 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 GameOn Entertainment Technologies, you can compare the effects of market volatilities on CD Projekt and GameOn Entertainment 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 GameOn Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CD Projekt and GameOn Entertainment.
Diversification Opportunities for CD Projekt and GameOn Entertainment
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OTGLY and GameOn is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CD Projekt SA and GameOn Entertainment Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameOn Entertainment 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 GameOn Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameOn Entertainment has no effect on the direction of CD Projekt i.e., CD Projekt and GameOn Entertainment go up and down completely randomly.
Pair Corralation between CD Projekt and GameOn Entertainment
Assuming the 90 days horizon CD Projekt is expected to generate 3.71 times less return on investment than GameOn Entertainment. But when comparing it to its historical volatility, CD Projekt SA is 4.65 times less risky than GameOn Entertainment. It trades about 0.04 of its potential returns per unit of risk. GameOn Entertainment Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4.99 in GameOn Entertainment Technologies on September 2, 2024 and sell it today you would lose (3.94) from holding GameOn Entertainment Technologies or give up 78.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
CD Projekt SA vs. GameOn Entertainment Technolog
Performance |
| Timeline |
| CD Projekt SA |
| GameOn Entertainment |
CD Projekt and GameOn Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CD Projekt and GameOn Entertainment
The main advantage of trading using opposite CD Projekt and GameOn Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CD Projekt position performs unexpectedly, GameOn Entertainment 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 GameOn Entertainment will offset losses from the drop in GameOn Entertainment's 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 |
| GameOn Entertainment vs. CD Projekt SA | GameOn Entertainment vs. Playtika Holding Corp | GameOn Entertainment vs. Square Enix Holdings | GameOn Entertainment vs. Nexon Co Ltd |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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