Correlation Between Abak SA and CI Games

Can any of the company-specific risk be diversified away by investing in both Abak SA 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 Abak SA and CI Games into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Abak SA and CI Games SA, you can compare the effects of market volatilities on Abak SA 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 Abak SA with a short position of CI Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abak SA and CI Games.

Diversification Opportunities for Abak SA and CI Games

0.01

Correlation Coefficient

Abak SA  CI Games

Significant diversification

The 3 months correlation between Abak and CIG is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Abak SA 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 Abak SA 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 Abak SA 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 Abak SA i.e., Abak SA and CI Games go up and down completely randomly.

Pair Corralation between Abak SA and CI Games

Assuming the 90 days trading horizon Abak SA is expected to under-perform the CI Games. In addition to that, Abak SA is 2.12 times more volatile than CI Games SA. It trades about -0.06 of its total potential returns per unit of risk. CI Games SA is currently generating about 0.24 per unit of volatility. If you would invest  128.00  in CI Games SA on December 20, 2024 and sell it today you would earn a total of  47.00  from holding CI Games SA or generate 36.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	40.68%
Values	Daily Returns

Abak SA  vs.  CI Games SA

Abak SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Abak SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

CI Games SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Games SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, CI Games reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Abak SA and CI Games

The main advantage of trading using opposite Abak SA and CI Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abak SA 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' long position.

The idea behind Abak SA and CI Games SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.