Correlation Between Games Workshop and Ondine Biomedical
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Ondine Biomedical 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 Ondine Biomedical 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 Ondine Biomedical, you can compare the effects of market volatilities on Games Workshop and Ondine Biomedical 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 Ondine Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Ondine Biomedical.
Diversification Opportunities for Games Workshop and Ondine Biomedical
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Games and Ondine is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Ondine Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ondine Biomedical 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 Ondine Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ondine Biomedical has no effect on the direction of Games Workshop i.e., Games Workshop and Ondine Biomedical go up and down completely randomly.
Pair Corralation between Games Workshop and Ondine Biomedical
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 1.51 times more return on investment than Ondine Biomedical. However, Games Workshop is 1.51 times more volatile than Ondine Biomedical. It trades about 0.21 of its potential returns per unit of risk. Ondine Biomedical is currently generating about -0.12 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Games Workshop Group vs. Ondine Biomedical
Performance |
| Timeline |
| Games Workshop Group |
| Ondine Biomedical |
Games Workshop and Ondine Biomedical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Ondine Biomedical
The main advantage of trading using opposite Games Workshop and Ondine Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Ondine Biomedical 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 Ondine Biomedical will offset losses from the drop in Ondine Biomedical'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 |
| Ondine Biomedical vs. Samsung Electronics Co | Ondine Biomedical vs. Samsung Electronics Co | Ondine Biomedical vs. Hyundai Motor | Ondine Biomedical vs. Toyota Motor 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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