Correlation Between Games Workshop and T Mobile
Can any of the company-specific risk be diversified away by investing in both Games Workshop and T Mobile 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 T Mobile 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 T Mobile, you can compare the effects of market volatilities on Games Workshop and T Mobile 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 T Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and T Mobile.
Diversification Opportunities for Games Workshop and T Mobile
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Games and TM5 is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile 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 T Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of Games Workshop i.e., Games Workshop and T Mobile go up and down completely randomly.
Pair Corralation between Games Workshop and T Mobile
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 1.67 times more return on investment than T Mobile. However, Games Workshop is 1.67 times more volatile than T Mobile. It trades about 0.07 of its potential returns per unit of risk. T Mobile is currently generating about 0.09 per unit of risk. If you would invest 7,901 in Games Workshop Group on August 30, 2024 and sell it today you would earn a total of 8,359 from holding Games Workshop Group or generate 105.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Games Workshop Group vs. T Mobile
Performance |
| Timeline |
| Games Workshop Group |
| T Mobile |
Games Workshop and T Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and T Mobile
The main advantage of trading using opposite Games Workshop and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, T Mobile 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 T Mobile will offset losses from the drop in T Mobile'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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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