Correlation Between Games Workshop and MELIA HOTELS
Can any of the company-specific risk be diversified away by investing in both Games Workshop and MELIA HOTELS 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 MELIA HOTELS 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 MELIA HOTELS, you can compare the effects of market volatilities on Games Workshop and MELIA HOTELS 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 MELIA HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and MELIA HOTELS.
Diversification Opportunities for Games Workshop and MELIA HOTELS
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Games and MELIA is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and MELIA HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MELIA HOTELS 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 MELIA HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MELIA HOTELS has no effect on the direction of Games Workshop i.e., Games Workshop and MELIA HOTELS go up and down completely randomly.
Pair Corralation between Games Workshop and MELIA HOTELS
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 1.26 times more return on investment than MELIA HOTELS. However, Games Workshop is 1.26 times more volatile than MELIA HOTELS. It trades about 0.13 of its potential returns per unit of risk. MELIA HOTELS is currently generating about -0.04 per unit of risk. If you would invest 11,503 in Games Workshop Group on September 3, 2024 and sell it today you would earn a total of 5,397 from holding Games Workshop Group or generate 46.92% 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. MELIA HOTELS
Performance |
| Timeline |
| Games Workshop Group |
| MELIA HOTELS |
Games Workshop and MELIA HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and MELIA HOTELS
The main advantage of trading using opposite Games Workshop and MELIA HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, MELIA HOTELS 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 MELIA HOTELS will offset losses from the drop in MELIA HOTELS's long position.| Games Workshop vs. TERADATA | Games Workshop vs. Marie Brizard Wine | Games Workshop vs. Haverty Furniture Companies | Games Workshop vs. DATANG INTL POW |
| MELIA HOTELS vs. TOTAL GABON | MELIA HOTELS vs. Walgreens Boots Alliance | MELIA HOTELS vs. Peak Resources Limited |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |