Correlation Between Games Workshop and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Naturhouse Health 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 Naturhouse Health 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 Naturhouse Health SA, you can compare the effects of market volatilities on Games Workshop and Naturhouse Health 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 Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Naturhouse Health.
Diversification Opportunities for Games Workshop and Naturhouse Health
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Games and Naturhouse is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health 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 Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of Games Workshop i.e., Games Workshop and Naturhouse Health go up and down completely randomly.
Pair Corralation between Games Workshop and Naturhouse Health
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 1.45 times more return on investment than Naturhouse Health. However, Games Workshop is 1.45 times more volatile than Naturhouse Health SA. It trades about 0.26 of its potential returns per unit of risk. Naturhouse Health SA is currently generating about 0.11 per unit of risk. If you would invest 1,308,632 in Games Workshop Group on November 3, 2024 and sell it today you would earn a total of 147,368 from holding Games Workshop Group or generate 11.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Games Workshop Group vs. Naturhouse Health SA
Performance |
| Timeline |
| Games Workshop Group |
| Naturhouse Health |
Games Workshop and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Naturhouse Health
The main advantage of trading using opposite Games Workshop and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Naturhouse Health 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 Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.| Games Workshop vs. Sovereign Metals | Games Workshop vs. Europa Metals | Games Workshop vs. Veolia Environnement VE | Games Workshop vs. Gaztransport et Technigaz |
| Naturhouse Health vs. United States Steel | Naturhouse Health vs. Lundin Mining Corp | Naturhouse Health vs. Symphony Environmental Technologies | Naturhouse Health vs. Iron Mountain |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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