Correlation Between TEN SQUARE and CD PROJEKT

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

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

Diversification Opportunities for TEN SQUARE and CD PROJEKT

0.71

Correlation Coefficient

TEN SQUARE  CD PROJEKT

Poor diversification

The 3 months correlation between TEN and CDR is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding TEN SQUARE GAMES 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 TEN SQUARE 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 TEN SQUARE GAMES 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 TEN SQUARE i.e., TEN SQUARE and CD PROJEKT go up and down completely randomly.

Pair Corralation between TEN SQUARE and CD PROJEKT

Assuming the 90 days trading horizon TEN SQUARE GAMES is expected to generate 0.96 times more return on investment than CD PROJEKT. However, TEN SQUARE GAMES is 1.05 times less risky than CD PROJEKT. It trades about 0.17 of its potential returns per unit of risk. CD PROJEKT SA is currently generating about 0.1 per unit of risk. If you would invest  7,200  in TEN SQUARE GAMES on December 29, 2024 and sell it today you would earn a total of  1,740  from holding TEN SQUARE GAMES or generate 24.17% return on investment over 90 days.

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

TEN SQUARE GAMES  vs.  CD PROJEKT SA

TEN SQUARE GAMES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TEN SQUARE GAMES are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, TEN SQUARE reported solid returns over the last few months and may actually be approaching a breakup point.

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 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, CD PROJEKT reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TEN SQUARE and CD PROJEKT

The main advantage of trading using opposite TEN SQUARE and CD PROJEKT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TEN SQUARE 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 TEN SQUARE GAMES 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.

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 Stocks Directory module to find actively traded stocks across global markets.