Correlation Between Konami Holdings and CD Projekt

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

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

Diversification Opportunities for Konami Holdings and CD Projekt

0.0

Correlation Coefficient

Konami Holdings  CD Projekt

Pay attention - limited upside

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

Pair Corralation between Konami Holdings and CD Projekt

If you would invest  1,162  in CD Projekt SA on December 29, 2024 and sell it today you would earn a total of  201.00  from holding CD Projekt SA or generate 17.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Konami Holdings  vs.  CD Projekt SA

Konami Holdings

Risk-Adjusted Performance

Very Weak

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

CD Projekt SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CD Projekt SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, CD Projekt showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Konami Holdings and CD Projekt

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

The idea behind Konami Holdings and CD Projekt 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..