Correlation Between Games Workshop and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Fast Retailing 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 Fast Retailing 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 Fast Retailing Co, you can compare the effects of market volatilities on Games Workshop and Fast Retailing 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 Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Fast Retailing.
Diversification Opportunities for Games Workshop and Fast Retailing
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Games and Fast is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing 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 Fast Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Retailing has no effect on the direction of Games Workshop i.e., Games Workshop and Fast Retailing go up and down completely randomly.
Pair Corralation between Games Workshop and Fast Retailing
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 4.17 times more return on investment than Fast Retailing. However, Games Workshop is 4.17 times more volatile than Fast Retailing Co. It trades about 0.21 of its potential returns per unit of risk. Fast Retailing Co is currently generating about 0.45 per unit of risk. If you would invest 14,100 in Games Workshop Group on September 13, 2024 and sell it today you would earn a total of 2,800 from holding Games Workshop Group or generate 19.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Games Workshop Group vs. Fast Retailing Co
Performance |
| Timeline |
| Games Workshop Group |
| Fast Retailing |
Games Workshop and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Fast Retailing
The main advantage of trading using opposite Games Workshop and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Fast Retailing 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 Fast Retailing will offset losses from the drop in Fast Retailing's long position.| Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc |
| Fast Retailing vs. Tsingtao Brewery | Fast Retailing vs. ANTA SPORTS PRODUCT | Fast Retailing vs. USWE SPORTS AB | Fast Retailing vs. SCANSOURCE |
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 CEOs Directory module to screen CEOs from public companies around the world.
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