Correlation Between Games Workshop and Archer Daniels
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Archer Daniels 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 Archer Daniels 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 Archer Daniels Midland, you can compare the effects of market volatilities on Games Workshop and Archer Daniels 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 Archer Daniels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Archer Daniels.
Diversification Opportunities for Games Workshop and Archer Daniels
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Games and Archer is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Archer Daniels Midland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Daniels Midland 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 Archer Daniels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Daniels Midland has no effect on the direction of Games Workshop i.e., Games Workshop and Archer Daniels go up and down completely randomly.
Pair Corralation between Games Workshop and Archer Daniels
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 1.01 times more return on investment than Archer Daniels. However, Games Workshop is 1.01 times more volatile than Archer Daniels Midland. It trades about 0.3 of its potential returns per unit of risk. Archer Daniels Midland is currently generating about -0.12 per unit of risk. If you would invest 15,665 in Games Workshop Group on November 7, 2024 and sell it today you would earn a total of 1,785 from holding Games Workshop Group or generate 11.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Games Workshop Group vs. Archer Daniels Midland
Performance |
| Timeline |
| Games Workshop Group |
| Archer Daniels Midland |
Games Workshop and Archer Daniels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Archer Daniels
The main advantage of trading using opposite Games Workshop and Archer Daniels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Archer Daniels 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 Archer Daniels will offset losses from the drop in Archer Daniels' long position.| Games Workshop vs. COMBA TELECOM SYST | Games Workshop vs. Highlight Communications AG | Games Workshop vs. Spirent Communications plc | Games Workshop vs. SK TELECOM TDADR |
| Archer Daniels vs. Spirent Communications plc | Archer Daniels vs. Cairo Communication SpA | Archer Daniels vs. COMBA TELECOM SYST | Archer Daniels vs. Grupo Carso SAB |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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