Correlation Between Games Workshop and Retail Estates
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Retail Estates 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 Retail Estates 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 Retail Estates NV, you can compare the effects of market volatilities on Games Workshop and Retail Estates 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 Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Retail Estates.
Diversification Opportunities for Games Workshop and Retail Estates
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Games and Retail is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates NV 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 Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of Games Workshop i.e., Games Workshop and Retail Estates go up and down completely randomly.
Pair Corralation between Games Workshop and Retail Estates
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 4.34 times more return on investment than Retail Estates. However, Games Workshop is 4.34 times more volatile than Retail Estates NV. It trades about 0.18 of its potential returns per unit of risk. Retail Estates NV is currently generating about -0.37 per unit of risk. If you would invest 14,110 in Games Workshop Group on August 25, 2024 and sell it today you would earn a total of 2,360 from holding Games Workshop Group or generate 16.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Games Workshop Group vs. Retail Estates NV
Performance |
| Timeline |
| Games Workshop Group |
| Retail Estates NV |
Games Workshop and Retail Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Retail Estates
The main advantage of trading using opposite Games Workshop and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' long position.| Games Workshop vs. NISSAN CHEMICAL IND | Games Workshop vs. LG Display Co | Games Workshop vs. WESTLAKE CHEMICAL | Games Workshop vs. Sanyo Chemical Industries |
| Retail Estates vs. Simon Property Group | Retail Estates vs. Vicinity Centres | Retail Estates vs. Superior Plus Corp | Retail Estates vs. NMI Holdings |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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