Correlation Between Currys PLC and Games Workshop
Can any of the company-specific risk be diversified away by investing in both Currys PLC 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 Currys PLC and Games Workshop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Currys PLC and Games Workshop Group, you can compare the effects of market volatilities on Currys PLC 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 Currys PLC with a short position of Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Currys PLC and Games Workshop.
Diversification Opportunities for Currys PLC and Games Workshop
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Currys and Games is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Currys PLC 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 Currys PLC 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 Currys PLC 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 Currys PLC i.e., Currys PLC and Games Workshop go up and down completely randomly.
Pair Corralation between Currys PLC and Games Workshop
Assuming the 90 days horizon Currys PLC is expected to generate 14.93 times less return on investment than Games Workshop. But when comparing it to its historical volatility, Currys PLC is 1.08 times less risky than Games Workshop. It trades about 0.02 of its potential returns per unit of risk. Games Workshop Group is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 15,632 in Games Workshop Group on October 25, 2024 and sell it today you would earn a total of 1,078 from holding Games Workshop Group or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Currys PLC vs. Games Workshop Group
Performance |
| Timeline |
| Currys PLC |
| Games Workshop Group |
Currys PLC and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Currys PLC and Games Workshop
The main advantage of trading using opposite Currys PLC and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Currys PLC 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.| Currys PLC vs. PICKN PAY STORES | Currys PLC vs. Burlington Stores | Currys PLC vs. QINGCI GAMES INC | Currys PLC vs. Games Workshop Group |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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