Correlation Between Games Workshop and African Pioneer
Can any of the company-specific risk be diversified away by investing in both Games Workshop and African Pioneer 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 African Pioneer 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 African Pioneer PLC, you can compare the effects of market volatilities on Games Workshop and African Pioneer 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 African Pioneer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and African Pioneer.
Diversification Opportunities for Games Workshop and African Pioneer
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Games and African is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and African Pioneer PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on African Pioneer PLC 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 African Pioneer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of African Pioneer PLC has no effect on the direction of Games Workshop i.e., Games Workshop and African Pioneer go up and down completely randomly.
Pair Corralation between Games Workshop and African Pioneer
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 0.29 times more return on investment than African Pioneer. However, Games Workshop Group is 3.46 times less risky than African Pioneer. It trades about -0.08 of its potential returns per unit of risk. African Pioneer PLC is currently generating about -0.53 per unit of risk. If you would invest 1,442,000 in Games Workshop Group on November 28, 2024 and sell it today you would lose (23,000) from holding Games Workshop Group or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Games Workshop Group vs. African Pioneer PLC
Performance |
| Timeline |
| Games Workshop Group |
| African Pioneer PLC |
Games Workshop and African Pioneer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and African Pioneer
The main advantage of trading using opposite Games Workshop and African Pioneer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, African Pioneer 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 African Pioneer will offset losses from the drop in African Pioneer's long position.| Games Workshop vs. Livermore Investments Group | Games Workshop vs. Kinnevik Investment AB | Games Workshop vs. Jade Road Investments | Games Workshop vs. Aurora Investment Trust |
| African Pioneer vs. Travel Leisure Co | African Pioneer vs. Mobile Tornado Group | African Pioneer vs. Aeorema Communications Plc | African Pioneer vs. Universal Display 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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