Correlation Between Games Workshop and TEAM Plc
Can any of the company-specific risk be diversified away by investing in both Games Workshop and TEAM 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 TEAM 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 TEAM plc, you can compare the effects of market volatilities on Games Workshop and TEAM 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 TEAM Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and TEAM Plc.
Diversification Opportunities for Games Workshop and TEAM Plc
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Games and TEAM is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and TEAM plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEAM 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 TEAM Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEAM plc has no effect on the direction of Games Workshop i.e., Games Workshop and TEAM Plc go up and down completely randomly.
Pair Corralation between Games Workshop and TEAM Plc
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 0.69 times more return on investment than TEAM Plc. However, Games Workshop Group is 1.46 times less risky than TEAM Plc. It trades about 0.11 of its potential returns per unit of risk. TEAM plc is currently generating about -0.16 per unit of risk. If you would invest 876,904 in Games Workshop Group on September 4, 2024 and sell it today you would earn a total of 545,096 from holding Games Workshop Group or generate 62.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Games Workshop Group vs. TEAM plc
Performance |
| Timeline |
| Games Workshop Group |
| TEAM plc |
Games Workshop and TEAM Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and TEAM Plc
The main advantage of trading using opposite Games Workshop and TEAM Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, TEAM 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 TEAM Plc will offset losses from the drop in TEAM Plc's long position.| Games Workshop vs. Sovereign Metals | Games Workshop vs. Cornish Metals | Games Workshop vs. Universal Display Corp | Games Workshop vs. JD Sports Fashion |
| TEAM Plc vs. Flow Traders NV | TEAM Plc vs. Ebro Foods | TEAM Plc vs. Hilton Food Group | TEAM Plc vs. Axfood AB |
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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