Correlation Between CARSALES and CI GAMES
Can any of the company-specific risk be diversified away by investing in both CARSALES 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 CARSALES and CI GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CARSALESCOM and CI GAMES SA, you can compare the effects of market volatilities on CARSALES 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 CARSALES with a short position of CI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARSALES and CI GAMES.
Diversification Opportunities for CARSALES and CI GAMES
Excellent diversification
The 3 months correlation between CARSALES and CI7 is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CARSALESCOM 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 CARSALES 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 CARSALESCOM 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 CARSALES i.e., CARSALES and CI GAMES go up and down completely randomly.
Pair Corralation between CARSALES and CI GAMES
Assuming the 90 days trading horizon CARSALESCOM is expected to generate 0.34 times more return on investment than CI GAMES. However, CARSALESCOM is 2.94 times less risky than CI GAMES. It trades about 0.12 of its potential returns per unit of risk. CI GAMES SA is currently generating about -0.01 per unit of risk. If you would invest 1,673 in CARSALESCOM on September 2, 2024 and sell it today you would earn a total of 887.00 from holding CARSALESCOM or generate 53.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CARSALESCOM vs. CI GAMES SA
Performance |
| Timeline |
| CARSALESCOM |
| CI GAMES SA |
CARSALES and CI GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARSALES and CI GAMES
The main advantage of trading using opposite CARSALES and CI GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARSALES 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.| CARSALES vs. ASURE SOFTWARE | CARSALES vs. Austevoll Seafood ASA | CARSALES vs. INDOFOOD AGRI RES | CARSALES vs. Magic Software Enterprises |
| CI GAMES vs. Nintendo Co | CI GAMES vs. Sea Limited | CI GAMES vs. Superior Plus Corp | CI GAMES vs. NMI 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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