Correlation Between CI GAMES and Gladstone Investment

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

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

Diversification Opportunities for CI GAMES and Gladstone Investment

-0.11

Correlation Coefficient

CI GAMES  Gladstone Investment

Good diversification

The 3 months correlation between CI7 and Gladstone is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CI GAMES SA and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and CI 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 CI GAMES SA are associated (or correlated) with Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of CI GAMES i.e., CI GAMES and Gladstone Investment go up and down completely randomly.

Pair Corralation between CI GAMES and Gladstone Investment

Assuming the 90 days horizon CI GAMES SA is expected to under-perform the Gladstone Investment. In addition to that, CI GAMES is 2.76 times more volatile than Gladstone Investment. It trades about -0.15 of its total potential returns per unit of risk. Gladstone Investment is currently generating about 0.02 per unit of volatility. If you would invest  1,298  in Gladstone Investment on September 15, 2024 and sell it today you would earn a total of  7.00  from holding Gladstone Investment or generate 0.54% return on investment over 90 days.

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

CI GAMES SA  vs.  Gladstone Investment

CI GAMES SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CI GAMES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Gladstone Investment

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Investment are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Gladstone Investment reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CI GAMES and Gladstone Investment

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

The idea behind CI GAMES SA and Gladstone Investment 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.