Correlation Between CI GAMES and US Bancorp

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

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

Diversification Opportunities for CI GAMES and US Bancorp

-0.33

Correlation Coefficient

CI GAMES  US Bancorp

Very good diversification

The 3 months correlation between CI7 and UB5 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding CI GAMES SA and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp and CI GAMES 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 CI GAMES SA are associated (or correlated) with US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp has no effect on the direction of CI GAMES i.e., CI GAMES and US Bancorp go up and down completely randomly.

Pair Corralation between CI GAMES and US Bancorp

Assuming the 90 days horizon CI GAMES SA is expected to under-perform the US Bancorp. In addition to that, CI GAMES is 2.62 times more volatile than US Bancorp. It trades about -0.01 of its total potential returns per unit of risk. US Bancorp is currently generating about 0.09 per unit of volatility. If you would invest  3,460  in US Bancorp on August 31, 2024 and sell it today you would earn a total of  1,584  from holding US Bancorp or generate 45.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

CI GAMES SA  vs.  US Bancorp

CI GAMES SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

US Bancorp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in US Bancorp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, US Bancorp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CI GAMES and US Bancorp

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

The idea behind CI GAMES SA and US Bancorp 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.