Correlation Between GameStop Corp and Firan Technology
Can any of the company-specific risk be diversified away by investing in both GameStop Corp and Firan Technology 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 Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and Firan Technology Group, you can compare the effects of market volatilities on GameStop Corp and Firan Technology 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 Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and Firan Technology.
Diversification Opportunities for GameStop Corp and Firan Technology
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GameStop and Firan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology 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 Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of GameStop Corp i.e., GameStop Corp and Firan Technology go up and down completely randomly.
Pair Corralation between GameStop Corp and Firan Technology
Assuming the 90 days trading horizon GameStop Corp is expected to generate 2.0 times more return on investment than Firan Technology. However, GameStop Corp is 2.0 times more volatile than Firan Technology Group. It trades about 0.13 of its potential returns per unit of risk. Firan Technology Group is currently generating about 0.17 per unit of risk. If you would invest 1,978 in GameStop Corp on August 25, 2024 and sell it today you would earn a total of 705.00 from holding GameStop Corp or generate 35.64% 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. Firan Technology Group
Performance |
| Timeline |
| GameStop Corp |
| Firan Technology |
GameStop Corp and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameStop Corp and Firan Technology
The main advantage of trading using opposite GameStop Corp and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp position performs unexpectedly, Firan Technology 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 Firan Technology will offset losses from the drop in Firan Technology's long position.| GameStop Corp vs. eBay Inc | GameStop Corp vs. Superior Plus Corp | GameStop Corp vs. NMI Holdings | GameStop Corp vs. Origin Agritech |
| Firan Technology vs. BE Semiconductor Industries | Firan Technology vs. HOCHSCHILD MINING | Firan Technology vs. ANGLER GAMING PLC | Firan Technology vs. GameStop Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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