Correlation Between Algonquin Power and Games Workshop
Can any of the company-specific risk be diversified away by investing in both Algonquin Power 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 Algonquin Power and Games Workshop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algonquin Power Utilities and Games Workshop Group, you can compare the effects of market volatilities on Algonquin Power 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 Algonquin Power with a short position of Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Games Workshop.
Diversification Opportunities for Algonquin Power and Games Workshop
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Algonquin and Games is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities 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 Algonquin Power 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 Algonquin Power Utilities 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 Algonquin Power i.e., Algonquin Power and Games Workshop go up and down completely randomly.
Pair Corralation between Algonquin Power and Games Workshop
Assuming the 90 days horizon Algonquin Power Utilities is expected to under-perform the Games Workshop. But the stock apears to be less risky and, when comparing its historical volatility, Algonquin Power Utilities is 2.91 times less risky than Games Workshop. The stock trades about -0.08 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Games Workshop Group
Performance |
| Timeline |
| Algonquin Power Utilities |
| Games Workshop Group |
Algonquin Power and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Games Workshop
The main advantage of trading using opposite Algonquin Power and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power 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.| Algonquin Power vs. Superior Plus Corp | Algonquin Power vs. SIVERS SEMICONDUCTORS AB | Algonquin Power vs. Norsk Hydro ASA | Algonquin Power vs. Reliance Steel Aluminum |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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