Correlation Between CI Games and Centrum Finansowe

Can any of the company-specific risk be diversified away by investing in both CI Games and Centrum Finansowe 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 Centrum Finansowe 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 Centrum Finansowe Banku, you can compare the effects of market volatilities on CI Games and Centrum Finansowe 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 Centrum Finansowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Games and Centrum Finansowe.

Diversification Opportunities for CI Games and Centrum Finansowe

-0.42

Correlation Coefficient

CI Games  Centrum Finansowe

Very good diversification

The 3 months correlation between CIG and Centrum is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CI Games SA and Centrum Finansowe Banku in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrum Finansowe Banku 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 Centrum Finansowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrum Finansowe Banku has no effect on the direction of CI Games i.e., CI Games and Centrum Finansowe go up and down completely randomly.

Pair Corralation between CI Games and Centrum Finansowe

Assuming the 90 days trading horizon CI Games SA is expected to under-perform the Centrum Finansowe. But the stock apears to be less risky and, when comparing its historical volatility, CI Games SA is 1.32 times less risky than Centrum Finansowe. The stock trades about -0.05 of its potential returns per unit of risk. The Centrum Finansowe Banku is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  505.00  in Centrum Finansowe Banku on September 12, 2024 and sell it today you would earn a total of  80.00  from holding Centrum Finansowe Banku or generate 15.84% return on investment over 90 days.

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

CI Games SA  vs.  Centrum Finansowe Banku

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. Even with relatively invariable basic indicators, CI Games is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Centrum Finansowe Banku

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with CI Games and Centrum Finansowe

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

The idea behind CI Games SA and Centrum Finansowe Banku 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.