Correlation Between DALATA HOTEL and CI GAMES

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

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

Diversification Opportunities for DALATA HOTEL and CI GAMES

-0.68

Correlation Coefficient

DALATA HOTEL  CI GAMES

Excellent diversification

The 3 months correlation between DALATA and CI7 is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding DALATA HOTEL and CI GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI GAMES SA and DALATA HOTEL 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 DALATA HOTEL are associated (or correlated) with CI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI GAMES SA has no effect on the direction of DALATA HOTEL i.e., DALATA HOTEL and CI GAMES go up and down completely randomly.

Pair Corralation between DALATA HOTEL and CI GAMES

Assuming the 90 days trading horizon DALATA HOTEL is expected to generate 20.37 times less return on investment than CI GAMES. But when comparing it to its historical volatility, DALATA HOTEL is 5.13 times less risky than CI GAMES. It trades about 0.02 of its potential returns per unit of risk. CI GAMES SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  30.00  in CI GAMES SA on October 12, 2024 and sell it today you would earn a total of  1.00  from holding CI GAMES SA or generate 3.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

DALATA HOTEL  vs.  CI GAMES SA

DALATA HOTEL

Risk-Adjusted Performance

7 of 100

Modest

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

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 nearly stable basic indicators, CI GAMES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with DALATA HOTEL and CI GAMES

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

The idea behind DALATA HOTEL and CI GAMES 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.