Correlation Between Games Workshop and ViacomCBS
Can any of the company-specific risk be diversified away by investing in both Games Workshop and ViacomCBS 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 Games Workshop and ViacomCBS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Games Workshop Group and ViacomCBS, you can compare the effects of market volatilities on Games Workshop and ViacomCBS 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 Games Workshop with a short position of ViacomCBS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and ViacomCBS.
Diversification Opportunities for Games Workshop and ViacomCBS
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Games and ViacomCBS is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and ViacomCBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ViacomCBS and Games Workshop 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 Games Workshop Group are associated (or correlated) with ViacomCBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ViacomCBS has no effect on the direction of Games Workshop i.e., Games Workshop and ViacomCBS go up and down completely randomly.
Pair Corralation between Games Workshop and ViacomCBS
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 1.75 times more return on investment than ViacomCBS. However, Games Workshop is 1.75 times more volatile than ViacomCBS. It trades about 0.22 of its potential returns per unit of risk. ViacomCBS is currently generating about 0.08 per unit of risk. If you would invest 14,000 in Games Workshop Group on September 1, 2024 and sell it today you would earn a total of 2,900 from holding Games Workshop Group or generate 20.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Games Workshop Group vs. ViacomCBS
Performance |
| Timeline |
| Games Workshop Group |
| ViacomCBS |
Games Workshop and ViacomCBS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and ViacomCBS
The main advantage of trading using opposite Games Workshop and ViacomCBS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, ViacomCBS 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 ViacomCBS will offset losses from the drop in ViacomCBS's long position.| Games Workshop vs. MARKET VECTR RETAIL | Games Workshop vs. NURAN WIRELESS INC | Games Workshop vs. Burlington Stores | Games Workshop vs. Ross Stores |
| ViacomCBS vs. Netflix | ViacomCBS vs. Warner Music Group | ViacomCBS vs. Superior Plus Corp | ViacomCBS vs. NMI Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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