Correlation Between GameStop Corp and Chiba Bank
Can any of the company-specific risk be diversified away by investing in both GameStop Corp and Chiba Bank 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 Chiba Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and Chiba Bank Ltd, you can compare the effects of market volatilities on GameStop Corp and Chiba Bank 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 Chiba Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and Chiba Bank.
Diversification Opportunities for GameStop Corp and Chiba Bank
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GameStop and Chiba is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and Chiba Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiba Bank 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 Chiba Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiba Bank has no effect on the direction of GameStop Corp i.e., GameStop Corp and Chiba Bank go up and down completely randomly.
Pair Corralation between GameStop Corp and Chiba Bank
Considering the 90-day investment horizon GameStop Corp is expected to generate 2.55 times more return on investment than Chiba Bank. However, GameStop Corp is 2.55 times more volatile than Chiba Bank Ltd. It trades about 0.05 of its potential returns per unit of risk. Chiba Bank Ltd is currently generating about 0.02 per unit of risk. If you would invest 2,024 in GameStop Corp on August 31, 2024 and sell it today you would earn a total of 1,065 from holding GameStop Corp or generate 52.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GameStop Corp vs. Chiba Bank Ltd
Performance |
| Timeline |
| GameStop Corp |
| Chiba Bank |
GameStop Corp and Chiba Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameStop Corp and Chiba Bank
The main advantage of trading using opposite GameStop Corp and Chiba Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp position performs unexpectedly, Chiba Bank 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 Chiba Bank will offset losses from the drop in Chiba Bank's long position.| GameStop Corp vs. RH | GameStop Corp vs. Dicks Sporting Goods | GameStop Corp vs. Best Buy Co | GameStop Corp vs. AutoZone |
| Chiba Bank vs. Bank Mandiri Persero | Chiba Bank vs. Piraeus Bank SA | Chiba Bank vs. Eurobank Ergasias Services | Chiba Bank vs. Kasikornbank Public Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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