Correlation Between CI Games and Vercom SA

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

Diversification Opportunities for CI Games and Vercom SA

-0.31

Correlation Coefficient

CI Games  Vercom SA

Very good diversification

The 3 months correlation between CIG and Vercom is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding CI Games SA and Vercom SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vercom SA 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 Vercom SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vercom SA has no effect on the direction of CI Games i.e., CI Games and Vercom SA go up and down completely randomly.

Pair Corralation between CI Games and Vercom SA

Assuming the 90 days trading horizon CI Games SA is expected to generate 1.62 times more return on investment than Vercom SA. However, CI Games is 1.62 times more volatile than Vercom SA. It trades about 0.65 of its potential returns per unit of risk. Vercom SA is currently generating about -0.26 per unit of risk. If you would invest  126.00  in CI Games SA on October 22, 2024 and sell it today you would earn a total of  41.00  from holding CI Games SA or generate 32.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

CI Games SA  vs.  Vercom SA

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.

Vercom SA

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vercom SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Vercom SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with CI Games and Vercom SA

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

The idea behind CI Games SA and Vercom 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.