Correlation Between Gapwaves and Cint Group

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

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

Diversification Opportunities for Gapwaves and Cint Group

-0.46

Correlation Coefficient

Gapwaves  Cint Group

Very good diversification

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

Pair Corralation between Gapwaves and Cint Group

Assuming the 90 days trading horizon Gapwaves AB Series is expected to generate 3.41 times more return on investment than Cint Group. However, Gapwaves is 3.41 times more volatile than Cint Group AB. It trades about 0.02 of its potential returns per unit of risk. Cint Group AB is currently generating about -0.56 per unit of risk. 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

Gapwaves AB Series  vs.  Cint Group AB

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.

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.

Pair Trading with Gapwaves and Cint Group

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

The idea behind Gapwaves AB Series and Cint Group AB 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 Stocks Directory module to find actively traded stocks across global markets.