Correlation Between Gold Road and CI GAMES

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

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

Diversification Opportunities for Gold Road and CI GAMES

0.81

Correlation Coefficient

Gold Road  CI GAMES

Very poor diversification

The 3 months correlation between Gold and CI7 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources 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 Gold Road 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 Gold Road Resources 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 Gold Road i.e., Gold Road and CI GAMES go up and down completely randomly.

Pair Corralation between Gold Road and CI GAMES

Assuming the 90 days horizon Gold Road is expected to generate 1.13 times less return on investment than CI GAMES. But when comparing it to its historical volatility, Gold Road Resources is 1.89 times less risky than CI GAMES. It trades about 0.11 of its potential returns per unit of risk. CI GAMES SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  34.00  in CI GAMES SA on December 24, 2024 and sell it today you would earn a total of  4.00  from holding CI GAMES SA or generate 11.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Gold Road Resources  vs.  CI GAMES SA

Gold Road Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Road Resources are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Gold Road reported solid returns over the last few months and may actually be approaching a breakup point.

CI GAMES SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CI GAMES SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CI GAMES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gold Road and CI GAMES

The main advantage of trading using opposite Gold Road and CI GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road 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 Gold Road Resources 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.