Correlation Between Games Workshop and ASOS Plc
Can any of the company-specific risk be diversified away by investing in both Games Workshop and ASOS Plc 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 ASOS Plc 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 ASOS Plc, you can compare the effects of market volatilities on Games Workshop and ASOS Plc 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 ASOS Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and ASOS Plc.
Diversification Opportunities for Games Workshop and ASOS Plc
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Games and ASOS is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and ASOS Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASOS 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 ASOS Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASOS Plc has no effect on the direction of Games Workshop i.e., Games Workshop and ASOS Plc go up and down completely randomly.
Pair Corralation between Games Workshop and ASOS Plc
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 1.66 times more return on investment than ASOS Plc. However, Games Workshop is 1.66 times more volatile than ASOS Plc. It trades about 0.21 of its potential returns per unit of risk. ASOS Plc is currently generating about 0.11 per unit of risk. If you would invest 1,196,000 in Games Workshop Group on September 1, 2024 and sell it today you would earn a total of 217,000 from holding Games Workshop Group or generate 18.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Games Workshop Group vs. ASOS Plc
Performance |
| Timeline |
| Games Workshop Group |
| ASOS Plc |
Games Workshop and ASOS Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and ASOS Plc
The main advantage of trading using opposite Games Workshop and ASOS Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, ASOS Plc 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 ASOS Plc will offset losses from the drop in ASOS Plc's long position.| Games Workshop vs. Liberty Media Corp | Games Workshop vs. Live Nation Entertainment | Games Workshop vs. Catena Media PLC | Games Workshop vs. Intermediate Capital Group |
| ASOS Plc vs. Atalaya Mining | ASOS Plc vs. Blackrock World Mining | ASOS Plc vs. St Galler Kantonalbank | ASOS Plc vs. Ally Financial |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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