Correlation Between Games Workshop and Postal Savings
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Postal Savings 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 Postal Savings 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 Postal Savings Bank, you can compare the effects of market volatilities on Games Workshop and Postal Savings 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 Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Postal Savings.
Diversification Opportunities for Games Workshop and Postal Savings
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Games and Postal is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank 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 Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of Games Workshop i.e., Games Workshop and Postal Savings go up and down completely randomly.
Pair Corralation between Games Workshop and Postal Savings
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 2.31 times more return on investment than Postal Savings. However, Games Workshop is 2.31 times more volatile than Postal Savings Bank. It trades about 0.23 of its potential returns per unit of risk. Postal Savings Bank is currently generating about 0.06 per unit of risk. If you would invest 14,170 in Games Workshop Group on September 4, 2024 and sell it today you would earn a total of 3,190 from holding Games Workshop Group or generate 22.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Games Workshop Group vs. Postal Savings Bank
Performance |
| Timeline |
| Games Workshop Group |
| Postal Savings Bank |
Games Workshop and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Postal Savings
The main advantage of trading using opposite Games Workshop and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc |
| Postal Savings vs. CAIXABANK UNADR 13 | Postal Savings vs. Superior Plus Corp | Postal Savings vs. NMI Holdings | Postal Savings vs. Origin Agritech |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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