Correlation Between Games Workshop and Zoo Digital
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Zoo Digital 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 Zoo Digital 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 Zoo Digital Group, you can compare the effects of market volatilities on Games Workshop and Zoo Digital 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 Zoo Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Zoo Digital.
Diversification Opportunities for Games Workshop and Zoo Digital
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Games and Zoo is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Zoo Digital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoo Digital Group 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 Zoo Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoo Digital Group has no effect on the direction of Games Workshop i.e., Games Workshop and Zoo Digital go up and down completely randomly.
Pair Corralation between Games Workshop and Zoo Digital
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 0.34 times more return on investment than Zoo Digital. However, Games Workshop Group is 2.93 times less risky than Zoo Digital. It trades about 0.07 of its potential returns per unit of risk. Zoo Digital Group is currently generating about -0.03 per unit of risk. If you would invest 912,370 in Games Workshop Group on September 2, 2024 and sell it today you would earn a total of 500,630 from holding Games Workshop Group or generate 54.87% 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. Zoo Digital Group
Performance |
| Timeline |
| Games Workshop Group |
| Zoo Digital Group |
Games Workshop and Zoo Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Zoo Digital
The main advantage of trading using opposite Games Workshop and Zoo Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Zoo Digital 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 Zoo Digital will offset losses from the drop in Zoo Digital'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 |
| Zoo Digital vs. SupplyMe Capital PLC | Zoo Digital vs. Lloyds Banking Group | Zoo Digital vs. Premier African Minerals | Zoo Digital vs. SANTANDER UK 8 |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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