Correlation Between Games Workshop and Franklin Libertyshares
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Franklin Libertyshares 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 Franklin Libertyshares 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 Franklin Libertyshares ICAV, you can compare the effects of market volatilities on Games Workshop and Franklin Libertyshares 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 Franklin Libertyshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Franklin Libertyshares.
Diversification Opportunities for Games Workshop and Franklin Libertyshares
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Games and Franklin is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Franklin Libertyshares ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Libertyshares 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 Franklin Libertyshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Libertyshares has no effect on the direction of Games Workshop i.e., Games Workshop and Franklin Libertyshares go up and down completely randomly.
Pair Corralation between Games Workshop and Franklin Libertyshares
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 2.13 times more return on investment than Franklin Libertyshares. However, Games Workshop is 2.13 times more volatile than Franklin Libertyshares ICAV. It trades about 0.23 of its potential returns per unit of risk. Franklin Libertyshares ICAV is currently generating about 0.02 per unit of risk. If you would invest 1,313,976 in Games Workshop Group on October 25, 2024 and sell it today you would earn a total of 121,024 from holding Games Workshop Group or generate 9.21% 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. Franklin Libertyshares ICAV
Performance |
| Timeline |
| Games Workshop Group |
| Franklin Libertyshares |
Games Workshop and Franklin Libertyshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Franklin Libertyshares
The main advantage of trading using opposite Games Workshop and Franklin Libertyshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Franklin Libertyshares 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 Franklin Libertyshares will offset losses from the drop in Franklin Libertyshares' long position.| Games Workshop vs. Samsung Electronics Co | Games Workshop vs. Samsung Electronics Co | Games Workshop vs. Toyota Motor Corp | Games Workshop vs. Reliance Industries Ltd |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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