Correlation Between IMPERIAL TOBACCO and CI GAMES

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

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

Diversification Opportunities for IMPERIAL TOBACCO and CI GAMES

-0.19

Correlation Coefficient

IMPERIAL TOBACCO  CI GAMES

Good diversification

The 3 months correlation between IMPERIAL and CI7 is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO i.e., IMPERIAL TOBACCO and CI GAMES go up and down completely randomly.

Pair Corralation between IMPERIAL TOBACCO and CI GAMES

Assuming the 90 days trading horizon IMPERIAL TOBACCO is expected to generate 9.95 times less return on investment than CI GAMES. But when comparing it to its historical volatility, IMPERIAL TOBACCO is 2.3 times less risky than CI GAMES. It trades about 0.04 of its potential returns per unit of risk. CI GAMES SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  35.00  in CI GAMES SA on April 9, 2025 and sell it today you would earn a total of  14.00  from holding CI GAMES SA or generate 40.0% return on investment over 90 days.

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

IMPERIAL TOBACCO   vs.  CI GAMES SA

IMPERIAL TOBACCO

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IMPERIAL TOBACCO are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, IMPERIAL TOBACCO is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

CI GAMES SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI GAMES SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CI GAMES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IMPERIAL TOBACCO and CI GAMES

The main advantage of trading using opposite IMPERIAL TOBACCO and CI GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMPERIAL TOBACCO 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's long position.

The idea behind IMPERIAL TOBACCO 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.