Correlation Between CD PROJEKT and 11 Bit

Can any of the company-specific risk be diversified away by investing in both CD PROJEKT and 11 Bit 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 11 Bit 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 11 bit studios, you can compare the effects of market volatilities on CD PROJEKT and 11 Bit 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 11 Bit. Check out your portfolio center. Please also check ongoing floating volatility patterns of CD PROJEKT and 11 Bit.

Diversification Opportunities for CD PROJEKT and 11 Bit

0.83

Correlation Coefficient

CD PROJEKT  11 Bit

Very poor diversification

The 3 months correlation between CDR and 11B is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding CD PROJEKT SA and 11 bit studios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 11 bit studios 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 11 Bit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 11 bit studios has no effect on the direction of CD PROJEKT i.e., CD PROJEKT and 11 Bit go up and down completely randomly.

Pair Corralation between CD PROJEKT and 11 Bit

Assuming the 90 days trading horizon CD PROJEKT is expected to generate 1.62 times less return on investment than 11 Bit. But when comparing it to its historical volatility, CD PROJEKT SA is 1.2 times less risky than 11 Bit. It trades about 0.08 of its potential returns per unit of risk. 11 bit studios is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  17,020  in 11 bit studios on December 28, 2024 and sell it today you would earn a total of  2,880  from holding 11 bit studios or generate 16.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

CD PROJEKT SA  vs.  11 bit studios

CD PROJEKT SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CD PROJEKT SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, CD PROJEKT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

11 bit studios

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 11 bit studios are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, 11 Bit reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CD PROJEKT and 11 Bit

The main advantage of trading using opposite CD PROJEKT and 11 Bit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CD PROJEKT position performs unexpectedly, 11 Bit 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 11 Bit will offset losses from the drop in 11 Bit's long position.

The idea behind CD PROJEKT SA and 11 bit studios 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.

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 Anywhere module to track or share privately all of your investments from the convenience of any device.