Correlation Between Games Workshop and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Gamma Communications 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 Gamma Communications 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 Gamma Communications PLC, you can compare the effects of market volatilities on Games Workshop and Gamma Communications 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 Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Gamma Communications.
Diversification Opportunities for Games Workshop and Gamma Communications
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Games and Gamma is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Gamma Communications PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications 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 Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications PLC has no effect on the direction of Games Workshop i.e., Games Workshop and Gamma Communications go up and down completely randomly.
Pair Corralation between Games Workshop and Gamma Communications
Assuming the 90 days trading horizon Games Workshop is expected to generate 1.29 times less return on investment than Gamma Communications. In addition to that, Games Workshop is 1.34 times more volatile than Gamma Communications PLC. It trades about 0.07 of its total potential returns per unit of risk. Gamma Communications PLC is currently generating about 0.11 per unit of volatility. If you would invest 105,364 in Gamma Communications PLC on August 29, 2024 and sell it today you would earn a total of 52,036 from holding Gamma Communications PLC or generate 49.39% 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. Gamma Communications PLC
Performance |
| Timeline |
| Games Workshop Group |
| Gamma Communications PLC |
Games Workshop and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Gamma Communications
The main advantage of trading using opposite Games Workshop and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.| Games Workshop vs. SupplyMe Capital PLC | Games Workshop vs. FuelCell Energy | Games Workshop vs. Grand Vision Media | Games Workshop vs. DG Innovate PLC |
| Gamma Communications vs. SupplyMe Capital PLC | Gamma Communications vs. Premier African Minerals | Gamma Communications vs. SANTANDER UK 8 | Gamma Communications vs. Vodafone Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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