Correlation Between Games Workshop and DevEx Resources
Can any of the company-specific risk be diversified away by investing in both Games Workshop and DevEx Resources 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 DevEx Resources 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 DevEx Resources Limited, you can compare the effects of market volatilities on Games Workshop and DevEx Resources 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 DevEx Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and DevEx Resources.
Diversification Opportunities for Games Workshop and DevEx Resources
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Games and DevEx is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and DevEx Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DevEx Resources 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 DevEx Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DevEx Resources has no effect on the direction of Games Workshop i.e., Games Workshop and DevEx Resources go up and down completely randomly.
Pair Corralation between Games Workshop and DevEx Resources
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 0.21 times more return on investment than DevEx Resources. However, Games Workshop Group is 4.74 times less risky than DevEx Resources. It trades about 0.1 of its potential returns per unit of risk. DevEx Resources Limited is currently generating about 0.01 per unit of risk. If you would invest 10,725 in Games Workshop Group on September 3, 2024 and sell it today you would earn a total of 6,175 from holding Games Workshop Group or generate 57.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Games Workshop Group vs. DevEx Resources Limited
Performance |
| Timeline |
| Games Workshop Group |
| DevEx Resources |
Games Workshop and DevEx Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and DevEx Resources
The main advantage of trading using opposite Games Workshop and DevEx Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, DevEx Resources 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 DevEx Resources will offset losses from the drop in DevEx Resources' long position.| Games Workshop vs. TERADATA | Games Workshop vs. Marie Brizard Wine | Games Workshop vs. Haverty Furniture Companies | Games Workshop vs. DATANG INTL POW |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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