Correlation Between GAMING FAC and Games Workshop
Can any of the company-specific risk be diversified away by investing in both GAMING FAC 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 GAMING FAC and Games Workshop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMING FAC SA and Games Workshop Group, you can compare the effects of market volatilities on GAMING FAC 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 GAMING FAC with a short position of Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and Games Workshop.
Diversification Opportunities for GAMING FAC and Games Workshop
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GAMING and Games is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC 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 GAMING FAC 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 GAMING FAC 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 GAMING FAC i.e., GAMING FAC and Games Workshop go up and down completely randomly.
Pair Corralation between GAMING FAC and Games Workshop
Assuming the 90 days horizon GAMING FAC is expected to generate 1.69 times less return on investment than Games Workshop. In addition to that, GAMING FAC is 1.14 times more volatile than Games Workshop Group. It trades about 0.07 of its total potential returns per unit of risk. Games Workshop Group is currently generating about 0.14 per unit of volatility. If you would invest 14,680 in Games Workshop Group on August 27, 2024 and sell it today you would earn a total of 1,790 from holding Games Workshop Group or generate 12.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMING FAC SA vs. Games Workshop Group
Performance |
| Timeline |
| GAMING FAC SA |
| Games Workshop Group |
GAMING FAC and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMING FAC and Games Workshop
The main advantage of trading using opposite GAMING FAC and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMING FAC 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.The idea behind GAMING FAC SA and Games Workshop Group 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.| Games Workshop vs. The Hanover Insurance | Games Workshop vs. JSC Halyk bank | Games Workshop vs. Advanced Medical Solutions | Games Workshop vs. Avanos Medical |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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