Correlation Between CI GAMES and Air Canada

Can any of the company-specific risk be diversified away by investing in both CI GAMES and Air Canada 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 Air Canada 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 Air Canada, you can compare the effects of market volatilities on CI GAMES and Air Canada 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 Air Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI GAMES and Air Canada.

Diversification Opportunities for CI GAMES and Air Canada

-0.5

Correlation Coefficient

CI GAMES  Air Canada

Very good diversification

The 3 months correlation between CI7 and Air is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding CI GAMES SA and Air Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Canada 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 Air Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Canada has no effect on the direction of CI GAMES i.e., CI GAMES and Air Canada go up and down completely randomly.

Pair Corralation between CI GAMES and Air Canada

Assuming the 90 days horizon CI GAMES SA is expected to under-perform the Air Canada. In addition to that, CI GAMES is 2.35 times more volatile than Air Canada. It trades about -0.06 of its total potential returns per unit of risk. Air Canada is currently generating about 0.02 per unit of volatility. If you would invest  1,551  in Air Canada on August 29, 2024 and sell it today you would earn a total of  115.00  from holding Air Canada or generate 7.41% return on investment over 90 days.

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

CI GAMES SA  vs.  Air Canada

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Air Canada

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Air Canada are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Air Canada unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CI GAMES and Air Canada

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

The idea behind CI GAMES SA and Air Canada 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.