Correlation Between National Retail and Games Workshop
Can any of the company-specific risk be diversified away by investing in both National Retail 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 National Retail and Games Workshop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Retail Properties and Games Workshop Group, you can compare the effects of market volatilities on National Retail 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 National Retail with a short position of Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and Games Workshop.
Diversification Opportunities for National Retail and Games Workshop
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Games is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties 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 National Retail 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 National Retail Properties 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 National Retail i.e., National Retail and Games Workshop go up and down completely randomly.
Pair Corralation between National Retail and Games Workshop
Assuming the 90 days trading horizon National Retail Properties is expected to under-perform the Games Workshop. But the stock apears to be less risky and, when comparing its historical volatility, National Retail Properties is 1.92 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 0.18 of returns per unit of risk over similar time horizon. If you would invest 14,110 in Games Workshop Group on August 25, 2024 and sell it today you would earn a total of 2,360 from holding Games Workshop Group or generate 16.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Retail Properties vs. Games Workshop Group
Performance |
| Timeline |
| National Retail Prop |
| Games Workshop Group |
National Retail and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and Games Workshop
The main advantage of trading using opposite National Retail and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail 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.| National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc |
| Games Workshop vs. NISSAN CHEMICAL IND | Games Workshop vs. LG Display Co | Games Workshop vs. WESTLAKE CHEMICAL | Games Workshop vs. Sanyo Chemical Industries |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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