Correlation Between CNA Financial and Contagious Gaming

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

By analyzing existing cross correlation between CNA Financial and Contagious Gaming, you can compare the effects of market volatilities on CNA Financial and Contagious Gaming 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 CNA Financial with a short position of Contagious Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNA Financial and Contagious Gaming.

Diversification Opportunities for CNA Financial and Contagious Gaming

0.0

Correlation Coefficient

CNA Financial  Contagious Gaming

Pay attention - limited upside

The 3 months correlation between CNA and Contagious is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CNA Financial and Contagious Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contagious Gaming and CNA Financial 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 CNA Financial are associated (or correlated) with Contagious Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contagious Gaming has no effect on the direction of CNA Financial i.e., CNA Financial and Contagious Gaming go up and down completely randomly.

Pair Corralation between CNA Financial and Contagious Gaming

Considering the 90-day investment horizon CNA Financial is expected to generate 0.37 times more return on investment than Contagious Gaming. However, CNA Financial is 2.72 times less risky than Contagious Gaming. It trades about 0.03 of its potential returns per unit of risk. Contagious Gaming is currently generating about -0.07 per unit of risk. If you would invest  4,464  in CNA Financial on October 7, 2024 and sell it today you would earn a total of  317.00  from holding CNA Financial or generate 7.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.13%
Values	Daily Returns

CNA Financial  vs.  Contagious Gaming

CNA Financial

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CNA Financial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CNA Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Contagious Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Contagious Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Contagious Gaming is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CNA Financial and Contagious Gaming

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

The idea behind CNA Financial and Contagious Gaming 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.