Correlation Between Europa Metals and Games Workshop
Can any of the company-specific risk be diversified away by investing in both Europa Metals 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 Europa Metals and Games Workshop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europa Metals and Games Workshop Group, you can compare the effects of market volatilities on Europa Metals 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 Europa Metals with a short position of Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europa Metals and Games Workshop.
Diversification Opportunities for Europa Metals and Games Workshop
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Europa and Games is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Europa Metals 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 Europa Metals 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 Europa Metals 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 Europa Metals i.e., Europa Metals and Games Workshop go up and down completely randomly.
Pair Corralation between Europa Metals and Games Workshop
Assuming the 90 days trading horizon Europa Metals is expected to generate 3.83 times less return on investment than Games Workshop. In addition to that, Europa Metals is 1.74 times more volatile than Games Workshop Group. It trades about 0.01 of its total potential returns per unit of risk. Games Workshop Group is currently generating about 0.08 per unit of volatility. If you would invest 989,821 in Games Workshop Group on September 1, 2024 and sell it today you would earn a total of 423,179 from holding Games Workshop Group or generate 42.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europa Metals vs. Games Workshop Group
Performance |
| Timeline |
| Europa Metals |
| Games Workshop Group |
Europa Metals and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europa Metals and Games Workshop
The main advantage of trading using opposite Europa Metals and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europa Metals 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.| Europa Metals vs. Givaudan SA | Europa Metals vs. Antofagasta PLC | Europa Metals vs. Centamin PLC | Europa Metals vs. Atalaya Mining |
| Games Workshop vs. Liberty Media Corp | Games Workshop vs. Live Nation Entertainment | Games Workshop vs. Catena Media PLC | Games Workshop vs. Intermediate Capital Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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