Correlation Between Universal Entertainment and CI GAMES
Can any of the company-specific risk be diversified away by investing in both Universal Entertainment and CI 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 Universal Entertainment and CI GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Entertainment and CI GAMES SA, you can compare the effects of market volatilities on Universal Entertainment and CI 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 Universal Entertainment with a short position of CI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Entertainment and CI GAMES.
Diversification Opportunities for Universal Entertainment and CI GAMES
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Universal and CI7 is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Universal Entertainment and CI GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI GAMES SA and Universal Entertainment 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 Universal Entertainment are associated (or correlated) with CI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI GAMES SA has no effect on the direction of Universal Entertainment i.e., Universal Entertainment and CI GAMES go up and down completely randomly.
Pair Corralation between Universal Entertainment and CI GAMES
Assuming the 90 days trading horizon Universal Entertainment is expected to under-perform the CI GAMES. In addition to that, Universal Entertainment is 1.64 times more volatile than CI GAMES SA. It trades about -0.1 of its total potential returns per unit of risk. CI GAMES SA is currently generating about -0.03 per unit of volatility. If you would invest 33.00 in CI GAMES SA on September 12, 2024 and sell it today you would lose (1.00) from holding CI GAMES SA or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Entertainment vs. CI GAMES SA
Performance |
| Timeline |
| Universal Entertainment |
| CI GAMES SA |
Universal Entertainment and CI GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Entertainment and CI GAMES
The main advantage of trading using opposite Universal Entertainment and CI GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Entertainment position performs unexpectedly, CI 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 CI GAMES will offset losses from the drop in CI GAMES's long position.| Universal Entertainment vs. Apple Inc | Universal Entertainment vs. Apple Inc | Universal Entertainment vs. Apple Inc | Universal Entertainment vs. Apple Inc |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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