Correlation Between Games Workshop and Fonix Mobile
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Fonix Mobile 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 Fonix Mobile 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 Fonix Mobile plc, you can compare the effects of market volatilities on Games Workshop and Fonix Mobile 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 Fonix Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Fonix Mobile.
Diversification Opportunities for Games Workshop and Fonix Mobile
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Games and Fonix is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Fonix Mobile plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonix Mobile 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 Fonix Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonix Mobile plc has no effect on the direction of Games Workshop i.e., Games Workshop and Fonix Mobile go up and down completely randomly.
Pair Corralation between Games Workshop and Fonix Mobile
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 2.37 times more return on investment than Fonix Mobile. However, Games Workshop is 2.37 times more volatile than Fonix Mobile plc. It trades about 0.2 of its potential returns per unit of risk. Fonix Mobile plc is currently generating about -0.26 per unit of risk. If you would invest 1,204,000 in Games Workshop Group on September 2, 2024 and sell it today you would earn a total of 209,000 from holding Games Workshop Group or generate 17.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Games Workshop Group vs. Fonix Mobile plc
Performance |
| Timeline |
| Games Workshop Group |
| Fonix Mobile plc |
Games Workshop and Fonix Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Fonix Mobile
The main advantage of trading using opposite Games Workshop and Fonix Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Fonix Mobile 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 Fonix Mobile will offset losses from the drop in Fonix Mobile's long position.| Games Workshop vs. Uniper SE | Games Workshop vs. Mulberry Group PLC | Games Workshop vs. London Security Plc | Games Workshop vs. Triad Group PLC |
| Fonix Mobile vs. National Atomic Co | Fonix Mobile vs. Flutter Entertainment PLC | Fonix Mobile vs. Games Workshop Group | Fonix Mobile vs. Judges Scientific Plc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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