Correlation Between PLAYMATES TOYS and Games Workshop
Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS 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 PLAYMATES TOYS and Games Workshop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYMATES TOYS and Games Workshop Group, you can compare the effects of market volatilities on PLAYMATES TOYS 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 PLAYMATES TOYS with a short position of Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and Games Workshop.
Diversification Opportunities for PLAYMATES TOYS and Games Workshop
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between PLAYMATES and Games is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS 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 PLAYMATES TOYS 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 PLAYMATES TOYS 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 PLAYMATES TOYS i.e., PLAYMATES TOYS and Games Workshop go up and down completely randomly.
Pair Corralation between PLAYMATES TOYS and Games Workshop
Assuming the 90 days trading horizon PLAYMATES TOYS is expected to under-perform the Games Workshop. But the stock apears to be less risky and, when comparing its historical volatility, PLAYMATES TOYS is 1.56 times less risky than Games Workshop. The stock trades about -0.06 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 14,290 in Games Workshop Group on September 14, 2024 and sell it today you would earn a total of 2,640 from holding Games Workshop Group or generate 18.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYMATES TOYS vs. Games Workshop Group
Performance |
| Timeline |
| PLAYMATES TOYS |
| Games Workshop Group |
PLAYMATES TOYS and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYMATES TOYS and Games Workshop
The main advantage of trading using opposite PLAYMATES TOYS and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS 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.| PLAYMATES TOYS vs. GALENA MINING LTD | PLAYMATES TOYS vs. LION ONE METALS | PLAYMATES TOYS vs. ASSOC BR FOODS | PLAYMATES TOYS vs. TYSON FOODS A |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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