Correlation Between Ultimate Games and CD PROJEKT
Can any of the company-specific risk be diversified away by investing in both Ultimate Games and CD PROJEKT 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 Ultimate Games and CD PROJEKT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultimate Games SA and CD PROJEKT SA, you can compare the effects of market volatilities on Ultimate Games and CD PROJEKT 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 Ultimate Games with a short position of CD PROJEKT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultimate Games and CD PROJEKT.
Diversification Opportunities for Ultimate Games and CD PROJEKT
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ultimate and CDR is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ultimate Games SA and CD PROJEKT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CD PROJEKT SA and Ultimate 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 Ultimate Games SA are associated (or correlated) with CD PROJEKT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CD PROJEKT SA has no effect on the direction of Ultimate Games i.e., Ultimate Games and CD PROJEKT go up and down completely randomly.
Pair Corralation between Ultimate Games and CD PROJEKT
Assuming the 90 days trading horizon Ultimate Games SA is expected to under-perform the CD PROJEKT. But the stock apears to be less risky and, when comparing its historical volatility, Ultimate Games SA is 2.55 times less risky than CD PROJEKT. The stock trades about -0.12 of its potential returns per unit of risk. The CD PROJEKT SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 16,280 in CD PROJEKT SA on August 30, 2024 and sell it today you would earn a total of 180.00 from holding CD PROJEKT SA or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultimate Games SA vs. CD PROJEKT SA
Performance |
| Timeline |
| Ultimate Games SA |
| CD PROJEKT SA |
Ultimate Games and CD PROJEKT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultimate Games and CD PROJEKT
The main advantage of trading using opposite Ultimate Games and CD PROJEKT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultimate Games position performs unexpectedly, CD PROJEKT 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 CD PROJEKT will offset losses from the drop in CD PROJEKT's long position.| Ultimate Games vs. Gamedust SA | Ultimate Games vs. Gaming Factory SA | Ultimate Games vs. CI Games SA | Ultimate Games vs. Monnari Trade 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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