Correlation Between Games Workshop and Bunzl PLC
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Bunzl 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 Bunzl 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 Bunzl PLC, you can compare the effects of market volatilities on Games Workshop and Bunzl 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 Bunzl PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Bunzl PLC.
Diversification Opportunities for Games Workshop and Bunzl PLC
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Games and Bunzl is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Bunzl PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunzl 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 Bunzl PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunzl PLC has no effect on the direction of Games Workshop i.e., Games Workshop and Bunzl PLC go up and down completely randomly.
Pair Corralation between Games Workshop and Bunzl PLC
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 1.92 times more return on investment than Bunzl PLC. However, Games Workshop is 1.92 times more volatile than Bunzl PLC. It trades about 0.08 of its potential returns per unit of risk. Bunzl PLC is currently generating about 0.04 per unit of risk. If you would invest 674,429 in Games Workshop Group on August 30, 2024 and sell it today you would earn a total of 694,571 from holding Games Workshop Group or generate 102.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Games Workshop Group vs. Bunzl PLC
Performance |
| Timeline |
| Games Workshop Group |
| Bunzl PLC |
Games Workshop and Bunzl PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Bunzl PLC
The main advantage of trading using opposite Games Workshop and Bunzl PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Bunzl 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 Bunzl PLC will offset losses from the drop in Bunzl PLC's long position.| Games Workshop vs. Ondine Biomedical | Games Workshop vs. Europa Metals | Games Workshop vs. Lendinvest PLC | Games Workshop vs. Neometals |
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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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