Correlation Between Games Workshop and Kroger
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Kroger 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 Kroger 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 The Kroger Co, you can compare the effects of market volatilities on Games Workshop and Kroger 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 Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Kroger.
Diversification Opportunities for Games Workshop and Kroger
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Games and Kroger is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and The Kroger Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Kroger 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 Kroger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Kroger has no effect on the direction of Games Workshop i.e., Games Workshop and Kroger go up and down completely randomly.
Pair Corralation between Games Workshop and Kroger
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 1.53 times more return on investment than Kroger. However, Games Workshop is 1.53 times more volatile than The Kroger Co. It trades about 0.08 of its potential returns per unit of risk. The Kroger Co is currently generating about 0.05 per unit of risk. If you would invest 7,761 in Games Workshop Group on August 29, 2024 and sell it today you would earn a total of 8,499 from holding Games Workshop Group or generate 109.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Games Workshop Group vs. The Kroger Co
Performance |
| Timeline |
| Games Workshop Group |
| The Kroger |
Games Workshop and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Kroger
The main advantage of trading using opposite Games Workshop and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Kroger 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 Kroger will offset losses from the drop in Kroger's long position.| Games Workshop vs. Transport International Holdings | Games Workshop vs. Transportadora de Gas | Games Workshop vs. SCIENCE IN SPORT | Games Workshop vs. United Airlines Holdings |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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