Correlation Between VR Factory and CI Games

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

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

Diversification Opportunities for VR Factory and CI Games

0.08

Correlation Coefficient

VR Factory  CI Games

Significant diversification

The 3 months correlation between VRF and CIG is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding VR Factory Games 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 VR Factory 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 VR Factory Games 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 VR Factory i.e., VR Factory and CI Games go up and down completely randomly.

Pair Corralation between VR Factory and CI Games

Assuming the 90 days trading horizon VR Factory is expected to generate 10.7 times less return on investment than CI Games. In addition to that, VR Factory is 1.58 times more volatile than CI Games SA. It trades about 0.01 of its total potential returns per unit of risk. CI Games SA is currently generating about 0.22 per unit of volatility. If you would invest  179.00  in CI Games SA on April 24, 2025 and sell it today you would earn a total of  82.00  from holding CI Games SA or generate 45.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

VR Factory Games  vs.  CI Games SA

VR Factory Games

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VR Factory Games are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, VR Factory is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail 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 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, CI Games reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VR Factory and CI Games

The main advantage of trading using opposite VR Factory and CI Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VR Factory 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 VR Factory Games 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.