Correlation Between GameStop Corp and Games Workshop
Can any of the company-specific risk be diversified away by investing in both GameStop Corp and Games Workshop 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 Games Workshop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and Games Workshop Group, you can compare the effects of market volatilities on GameStop Corp and Games Workshop 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 Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and Games Workshop.
Diversification Opportunities for GameStop Corp and Games Workshop
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GameStop and Games is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and Games Workshop Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Games Workshop Group 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 Games Workshop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Games Workshop Group has no effect on the direction of GameStop Corp i.e., GameStop Corp and Games Workshop go up and down completely randomly.
Pair Corralation between GameStop Corp and Games Workshop
Assuming the 90 days trading horizon GameStop Corp is expected to under-perform the Games Workshop. In addition to that, GameStop Corp is 2.02 times more volatile than Games Workshop Group. It trades about -0.02 of its total potential returns per unit of risk. Games Workshop Group is currently generating about 0.09 per unit of volatility. If you would invest 15,782 in Games Workshop Group on October 25, 2024 and sell it today you would earn a total of 928.00 from holding Games Workshop Group or generate 5.88% 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. Games Workshop Group
Performance |
| Timeline |
| GameStop Corp |
| Games Workshop Group |
GameStop Corp and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameStop Corp and Games Workshop
The main advantage of trading using opposite GameStop Corp and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp position performs unexpectedly, Games Workshop 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 Games Workshop will offset losses from the drop in Games Workshop's long position.| GameStop Corp vs. Summit Materials | GameStop Corp vs. EAGLE MATERIALS | GameStop Corp vs. Alaska Air Group | GameStop Corp vs. Pentair plc |
| Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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