Correlation Between Games Workshop and MT Bank
Can any of the company-specific risk be diversified away by investing in both Games Workshop and MT Bank 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 MT Bank 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 MT Bank Corp, you can compare the effects of market volatilities on Games Workshop and MT Bank 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 MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and MT Bank.
Diversification Opportunities for Games Workshop and MT Bank
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Games and 0JW2 is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank Corp 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 MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of Games Workshop i.e., Games Workshop and MT Bank go up and down completely randomly.
Pair Corralation between Games Workshop and MT Bank
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 1.44 times more return on investment than MT Bank. However, Games Workshop is 1.44 times more volatile than MT Bank Corp. It trades about 0.27 of its potential returns per unit of risk. MT Bank Corp is currently generating about 0.22 per unit of risk. If you would invest 1,301,749 in Games Workshop Group on November 4, 2024 and sell it today you would earn a total of 154,251 from holding Games Workshop Group or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Games Workshop Group vs. MT Bank Corp
Performance |
| Timeline |
| Games Workshop Group |
| MT Bank Corp |
Games Workshop and MT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and MT Bank
The main advantage of trading using opposite Games Workshop and MT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, MT Bank 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 MT Bank will offset losses from the drop in MT Bank's long position.| Games Workshop vs. Spirent Communications plc | Games Workshop vs. Centaur Media | Games Workshop vs. Catalyst Media Group | Games Workshop vs. Ubisoft Entertainment |
| MT Bank vs. Empire Metals Limited | MT Bank vs. MyHealthChecked Plc | MT Bank vs. Qurate Retail Series | MT Bank vs. CVS Health Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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