Correlation Between GameStop Corp and Banc Of
Can any of the company-specific risk be diversified away by investing in both GameStop Corp and Banc Of 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 GameStop Corp and Banc Of into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and Banc of California, you can compare the effects of market volatilities on GameStop Corp and Banc Of 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 GameStop Corp with a short position of Banc Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and Banc Of.
Diversification Opportunities for GameStop Corp and Banc Of
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GameStop and Banc is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and Banc of California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banc of California and GameStop Corp 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 GameStop Corp are associated (or correlated) with Banc Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banc of California has no effect on the direction of GameStop Corp i.e., GameStop Corp and Banc Of go up and down completely randomly.
Pair Corralation between GameStop Corp and Banc Of
Considering the 90-day investment horizon GameStop Corp is expected to generate 6.57 times more return on investment than Banc Of. However, GameStop Corp is 6.57 times more volatile than Banc of California. It trades about 0.12 of its potential returns per unit of risk. Banc of California is currently generating about 0.18 per unit of risk. If you would invest 2,273 in GameStop Corp on October 26, 2024 and sell it today you would earn a total of 560.00 from holding GameStop Corp or generate 24.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GameStop Corp vs. Banc of California
Performance |
| Timeline |
| GameStop Corp |
| Banc of California |
GameStop Corp and Banc Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameStop Corp and Banc Of
The main advantage of trading using opposite GameStop Corp and Banc Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp position performs unexpectedly, Banc Of 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 Banc Of will offset losses from the drop in Banc Of's long position.| GameStop Corp vs. RH | GameStop Corp vs. Dicks Sporting Goods | GameStop Corp vs. Best Buy Co | GameStop Corp vs. AutoZone |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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