Correlation Between Games Workshop and Omnicom
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Omnicom 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 Omnicom 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 Omnicom Group, you can compare the effects of market volatilities on Games Workshop and Omnicom 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 Omnicom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Omnicom.
Diversification Opportunities for Games Workshop and Omnicom
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Games and Omnicom is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Omnicom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnicom Group 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 Omnicom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnicom Group has no effect on the direction of Games Workshop i.e., Games Workshop and Omnicom go up and down completely randomly.
Pair Corralation between Games Workshop and Omnicom
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 1.43 times more return on investment than Omnicom. However, Games Workshop is 1.43 times more volatile than Omnicom Group. It trades about 0.22 of its potential returns per unit of risk. Omnicom Group is currently generating about -0.17 per unit of risk. If you would invest 1,187,000 in Games Workshop Group on September 13, 2024 and sell it today you would earn a total of 228,000 from holding Games Workshop Group or generate 19.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Games Workshop Group vs. Omnicom Group
Performance |
| Timeline |
| Games Workshop Group |
| Omnicom Group |
Games Workshop and Omnicom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Omnicom
The main advantage of trading using opposite Games Workshop and Omnicom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Omnicom 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 Omnicom will offset losses from the drop in Omnicom's long position.| Games Workshop vs. Fonix Mobile plc | Games Workshop vs. MTI Wireless Edge | Games Workshop vs. Summit Materials Cl | Games Workshop vs. Zegona Communications Plc |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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