Correlation Between ALD SA and Games Workshop
Can any of the company-specific risk be diversified away by investing in both ALD SA and Games Workshop 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 ALD SA and Games Workshop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALD SA and Games Workshop Group, you can compare the effects of market volatilities on ALD SA and Games Workshop 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 ALD SA with a short position of Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALD SA and Games Workshop.
Diversification Opportunities for ALD SA and Games Workshop
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ALD and Games is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ALD SA and Games Workshop Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Games Workshop Group and ALD 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 ALD SA are associated (or correlated) with Games Workshop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Games Workshop Group has no effect on the direction of ALD SA i.e., ALD SA and Games Workshop go up and down completely randomly.
Pair Corralation between ALD SA and Games Workshop
Assuming the 90 days horizon ALD SA is expected to under-perform the Games Workshop. But the stock apears to be less risky and, when comparing its historical volatility, ALD SA is 1.23 times less risky than Games Workshop. The stock trades about -0.03 of its potential returns per unit of risk. The Games Workshop Group is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 12,715 in Games Workshop Group on August 31, 2024 and sell it today you would earn a total of 3,825 from holding Games Workshop Group or generate 30.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALD SA vs. Games Workshop Group
Performance |
| Timeline |
| ALD SA |
| Games Workshop Group |
ALD SA and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALD SA and Games Workshop
The main advantage of trading using opposite ALD SA and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALD SA position performs unexpectedly, Games Workshop 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 Games Workshop will offset losses from the drop in Games Workshop's long position.| ALD SA vs. Games Workshop Group | ALD SA vs. ANGLER GAMING PLC | ALD SA vs. TROPHY GAMES DEV | ALD SA vs. HOCHSCHILD MINING |
| Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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