Correlation Between GAMESTOP and RELO GROUP
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and RELO GROUP 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 and RELO GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and RELO GROUP INC, you can compare the effects of market volatilities on GAMESTOP and RELO GROUP 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 with a short position of RELO GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and RELO GROUP.
Diversification Opportunities for GAMESTOP and RELO GROUP
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GAMESTOP and RELO is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and RELO GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RELO GROUP INC and GAMESTOP 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 are associated (or correlated) with RELO GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RELO GROUP INC has no effect on the direction of GAMESTOP i.e., GAMESTOP and RELO GROUP go up and down completely randomly.
Pair Corralation between GAMESTOP and RELO GROUP
Assuming the 90 days trading horizon GAMESTOP is expected to generate 3.36 times more return on investment than RELO GROUP. However, GAMESTOP is 3.36 times more volatile than RELO GROUP INC. It trades about 0.05 of its potential returns per unit of risk. RELO GROUP INC is currently generating about 0.0 per unit of risk. If you would invest 1,719 in GAMESTOP on September 14, 2024 and sell it today you would earn a total of 1,025 from holding GAMESTOP or generate 59.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
GAMESTOP vs. RELO GROUP INC
Performance |
| Timeline |
| GAMESTOP |
| RELO GROUP INC |
GAMESTOP and RELO GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and RELO GROUP
The main advantage of trading using opposite GAMESTOP and RELO GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, RELO GROUP 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 RELO GROUP will offset losses from the drop in RELO GROUP's long position.The idea behind GAMESTOP and RELO GROUP INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| RELO GROUP vs. GAMESTOP | RELO GROUP vs. Tyson Foods | RELO GROUP vs. Performance Food Group | RELO GROUP vs. National Beverage 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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