Correlation Between GAMESTOP and MARUHA NICHIRO
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and MARUHA NICHIRO 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 MARUHA NICHIRO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and MARUHA NICHIRO, you can compare the effects of market volatilities on GAMESTOP and MARUHA NICHIRO 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 MARUHA NICHIRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and MARUHA NICHIRO.
Diversification Opportunities for GAMESTOP and MARUHA NICHIRO
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GAMESTOP and MARUHA is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and MARUHA NICHIRO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARUHA NICHIRO 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 MARUHA NICHIRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARUHA NICHIRO has no effect on the direction of GAMESTOP i.e., GAMESTOP and MARUHA NICHIRO go up and down completely randomly.
Pair Corralation between GAMESTOP and MARUHA NICHIRO
Assuming the 90 days trading horizon GAMESTOP is expected to generate 3.07 times more return on investment than MARUHA NICHIRO. However, GAMESTOP is 3.07 times more volatile than MARUHA NICHIRO. It trades about 0.27 of its potential returns per unit of risk. MARUHA NICHIRO is currently generating about 0.24 per unit of risk. If you would invest 2,047 in GAMESTOP on September 5, 2024 and sell it today you would earn a total of 545.00 from holding GAMESTOP or generate 26.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMESTOP vs. MARUHA NICHIRO
Performance |
| Timeline |
| GAMESTOP |
| MARUHA NICHIRO |
GAMESTOP and MARUHA NICHIRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and MARUHA NICHIRO
The main advantage of trading using opposite GAMESTOP and MARUHA NICHIRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, MARUHA NICHIRO 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 MARUHA NICHIRO will offset losses from the drop in MARUHA NICHIRO's long position.The idea behind GAMESTOP and MARUHA NICHIRO 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.| MARUHA NICHIRO vs. TOTAL GABON | MARUHA NICHIRO vs. Walgreens Boots Alliance | MARUHA NICHIRO vs. Peak Resources Limited |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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