Correlation Between PLAYWAY SA and CI Games

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

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

Diversification Opportunities for PLAYWAY SA and CI Games

0.36

Correlation Coefficient

PLAYWAY SA  CI Games

Weak diversification

The 3 months correlation between PLAYWAY and CIG is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding PLAYWAY SA and CI Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Games SA and PLAYWAY SA 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 PLAYWAY SA are associated (or correlated) with CI Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Games SA has no effect on the direction of PLAYWAY SA i.e., PLAYWAY SA and CI Games go up and down completely randomly.

Pair Corralation between PLAYWAY SA and CI Games

Assuming the 90 days trading horizon PLAYWAY SA is expected to generate 0.53 times more return on investment than CI Games. However, PLAYWAY SA is 1.9 times less risky than CI Games. It trades about 0.0 of its potential returns per unit of risk. CI Games SA is currently generating about -0.01 per unit of risk. If you would invest  30,421  in PLAYWAY SA on September 13, 2024 and sell it today you would lose (1,671) from holding PLAYWAY SA or give up 5.49% of portfolio value over 90 days.

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

PLAYWAY SA  vs.  CI Games SA

PLAYWAY SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYWAY SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, PLAYWAY SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

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. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with PLAYWAY SA and CI Games

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

The idea behind PLAYWAY SA and CI Games 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.