Correlation Between 11 Bit and CD PROJEKT

Can any of the company-specific risk be diversified away by investing in both 11 Bit 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 11 Bit and CD PROJEKT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 11 bit studios and CD PROJEKT SA, you can compare the effects of market volatilities on 11 Bit 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 11 Bit with a short position of CD PROJEKT. Check out your portfolio center. Please also check ongoing floating volatility patterns of 11 Bit and CD PROJEKT.

Diversification Opportunities for 11 Bit and CD PROJEKT

0.59

Correlation Coefficient

11 Bit  CD PROJEKT

Very weak diversification

The 3 months correlation between 11B and CDR is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding 11 bit studios 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 11 Bit 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 11 bit studios 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 11 Bit i.e., 11 Bit and CD PROJEKT go up and down completely randomly.

Pair Corralation between 11 Bit and CD PROJEKT

Assuming the 90 days trading horizon 11 bit studios is expected to under-perform the CD PROJEKT. In addition to that, 11 Bit is 2.75 times more volatile than CD PROJEKT SA. It trades about -0.21 of its total potential returns per unit of risk. CD PROJEKT SA is currently generating about 0.03 per unit of volatility. If you would invest  17,465  in CD PROJEKT SA on September 5, 2024 and sell it today you would earn a total of  480.00  from holding CD PROJEKT SA or generate 2.75% return on investment over 90 days.

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

11 bit studios  vs.  CD PROJEKT SA

11 bit studios

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 11 bit studios has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

CD PROJEKT SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CD PROJEKT SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, CD PROJEKT is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with 11 Bit and CD PROJEKT

The main advantage of trading using opposite 11 Bit and CD PROJEKT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 11 Bit 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 11 bit studios 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.