Correlation Between GameStop Corp and 1StdibsCom
Can any of the company-specific risk be diversified away by investing in both GameStop Corp and 1StdibsCom 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 1StdibsCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and 1StdibsCom, you can compare the effects of market volatilities on GameStop Corp and 1StdibsCom 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 1StdibsCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and 1StdibsCom.
Diversification Opportunities for GameStop Corp and 1StdibsCom
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GameStop and 1StdibsCom is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and 1StdibsCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1StdibsCom 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 1StdibsCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1StdibsCom has no effect on the direction of GameStop Corp i.e., GameStop Corp and 1StdibsCom go up and down completely randomly.
Pair Corralation between GameStop Corp and 1StdibsCom
Considering the 90-day investment horizon GameStop Corp is expected to generate 1.38 times more return on investment than 1StdibsCom. However, GameStop Corp is 1.38 times more volatile than 1StdibsCom. It trades about 0.21 of its potential returns per unit of risk. 1StdibsCom is currently generating about -0.02 per unit of risk. If you would invest 2,644 in GameStop Corp on September 18, 2024 and sell it today you would earn a total of 482.00 from holding GameStop Corp or generate 18.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GameStop Corp vs. 1StdibsCom
Performance |
| Timeline |
| GameStop Corp |
| 1StdibsCom |
GameStop Corp and 1StdibsCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameStop Corp and 1StdibsCom
The main advantage of trading using opposite GameStop Corp and 1StdibsCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp position performs unexpectedly, 1StdibsCom 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 1StdibsCom will offset losses from the drop in 1StdibsCom's long position.| GameStop Corp vs. Arhaus Inc | GameStop Corp vs. Floor Decor Holdings | GameStop Corp vs. Live Ventures | GameStop Corp vs. Macys Inc |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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