Correlation Between Games Workshop and SHIN NIPPON
Can any of the company-specific risk be diversified away by investing in both Games Workshop and SHIN NIPPON 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 SHIN NIPPON 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 SHIN NIPPON MIOMEDI, you can compare the effects of market volatilities on Games Workshop and SHIN NIPPON 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 SHIN NIPPON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and SHIN NIPPON.
Diversification Opportunities for Games Workshop and SHIN NIPPON
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Games and SHIN is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and SHIN NIPPON MIOMEDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIN NIPPON MIOMEDI 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 SHIN NIPPON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIN NIPPON MIOMEDI has no effect on the direction of Games Workshop i.e., Games Workshop and SHIN NIPPON go up and down completely randomly.
Pair Corralation between Games Workshop and SHIN NIPPON
Assuming the 90 days trading horizon Games Workshop is expected to generate 1.36 times less return on investment than SHIN NIPPON. In addition to that, Games Workshop is 2.06 times more volatile than SHIN NIPPON MIOMEDI. It trades about 0.17 of its total potential returns per unit of risk. SHIN NIPPON MIOMEDI is currently generating about 0.48 per unit of volatility. If you would invest 760.00 in SHIN NIPPON MIOMEDI on August 31, 2024 and sell it today you would earn a total of 195.00 from holding SHIN NIPPON MIOMEDI or generate 25.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Games Workshop Group vs. SHIN NIPPON MIOMEDI
Performance |
| Timeline |
| Games Workshop Group |
| SHIN NIPPON MIOMEDI |
Games Workshop and SHIN NIPPON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and SHIN NIPPON
The main advantage of trading using opposite Games Workshop and SHIN NIPPON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, SHIN NIPPON 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 SHIN NIPPON will offset losses from the drop in SHIN NIPPON's long position.| Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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