Correlation Between Global Dominion and CIE Automotive

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

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

Diversification Opportunities for Global Dominion and CIE Automotive

0.69

Correlation Coefficient

Global Dominion  CIE Automotive

Poor diversification

The 3 months correlation between Global and CIE is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Global Dominion Access and CIE Automotive SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIE Automotive SA and Global Dominion 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 Global Dominion Access are associated (or correlated) with CIE Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIE Automotive SA has no effect on the direction of Global Dominion i.e., Global Dominion and CIE Automotive go up and down completely randomly.

Pair Corralation between Global Dominion and CIE Automotive

Assuming the 90 days trading horizon Global Dominion Access is expected to generate 1.73 times more return on investment than CIE Automotive. However, Global Dominion is 1.73 times more volatile than CIE Automotive SA. It trades about 0.23 of its potential returns per unit of risk. CIE Automotive SA is currently generating about 0.14 per unit of risk. If you would invest  279.00  in Global Dominion Access on April 24, 2025 and sell it today you would earn a total of  82.00  from holding Global Dominion Access or generate 29.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Global Dominion Access  vs.  CIE Automotive SA

Global Dominion Access

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global Dominion Access are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Global Dominion exhibited solid returns over the last few months and may actually be approaching a breakup point.

CIE Automotive SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CIE Automotive SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, CIE Automotive may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Global Dominion and CIE Automotive

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

The idea behind Global Dominion Access and CIE Automotive 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.