Correlation Between Cint Group and Gapwaves

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

By analyzing existing cross correlation between Cint Group AB and Gapwaves AB Series, you can compare the effects of market volatilities on Cint Group and Gapwaves 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 Cint Group with a short position of Gapwaves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cint Group and Gapwaves.

Diversification Opportunities for Cint Group and Gapwaves

-0.46

Correlation Coefficient

Cint Group  Gapwaves

Very good diversification

The 3 months correlation between Cint and Gapwaves is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Cint Group AB and Gapwaves AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gapwaves AB Series and Cint Group 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 Cint Group AB are associated (or correlated) with Gapwaves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gapwaves AB Series has no effect on the direction of Cint Group i.e., Cint Group and Gapwaves go up and down completely randomly.

Pair Corralation between Cint Group and Gapwaves

Assuming the 90 days trading horizon Cint Group AB is expected to under-perform the Gapwaves. But the stock apears to be less risky and, when comparing its historical volatility, Cint Group AB is 3.41 times less risky than Gapwaves. The stock trades about -0.56 of its potential returns per unit of risk. The Gapwaves AB Series is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,316  in Gapwaves AB Series on October 7, 2024 and sell it today you would lose (8.00) from holding Gapwaves AB Series or give up 0.61% of portfolio value over 90 days.

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

Cint Group AB  vs.  Gapwaves AB Series

Cint Group AB

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cint Group AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cint Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gapwaves AB Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gapwaves AB Series has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Cint Group and Gapwaves

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

The idea behind Cint Group AB and Gapwaves AB Series 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 Transaction History module to view history of all your transactions and understand their impact on performance.