Correlation Between CD Projekt and Mixi

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

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

Diversification Opportunities for CD Projekt and Mixi

0.87

Correlation Coefficient

CD Projekt  Mixi

Very poor diversification

The 3 months correlation between OTGLY and Mixi is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding CD Projekt SA and Mixi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mixi Inc and CD Projekt 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 CD Projekt SA are associated (or correlated) with Mixi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mixi Inc has no effect on the direction of CD Projekt i.e., CD Projekt and Mixi go up and down completely randomly.

Pair Corralation between CD Projekt and Mixi

If you would invest  1,692  in Mixi Inc on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Mixi Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	29.69%
Values	Daily Returns

CD Projekt SA  vs.  Mixi Inc

CD Projekt SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CD Projekt SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Mixi Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CD Projekt and Mixi

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

The idea behind CD Projekt SA and Mixi Inc 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.