Correlation Between GAMESTOP and ALGOMA STEEL
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and ALGOMA STEEL 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 ALGOMA STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and ALGOMA STEEL GROUP, you can compare the effects of market volatilities on GAMESTOP and ALGOMA STEEL 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 ALGOMA STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and ALGOMA STEEL.
Diversification Opportunities for GAMESTOP and ALGOMA STEEL
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between GAMESTOP and ALGOMA is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and ALGOMA STEEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALGOMA STEEL GROUP 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 ALGOMA STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALGOMA STEEL GROUP has no effect on the direction of GAMESTOP i.e., GAMESTOP and ALGOMA STEEL go up and down completely randomly.
Pair Corralation between GAMESTOP and ALGOMA STEEL
Assuming the 90 days trading horizon GAMESTOP is expected to generate 1.44 times more return on investment than ALGOMA STEEL. However, GAMESTOP is 1.44 times more volatile than ALGOMA STEEL GROUP. It trades about 0.16 of its potential returns per unit of risk. ALGOMA STEEL GROUP is currently generating about -0.04 per unit of risk. If you would invest 1,901 in GAMESTOP on October 25, 2024 and sell it today you would earn a total of 742.00 from holding GAMESTOP or generate 39.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMESTOP vs. ALGOMA STEEL GROUP
Performance |
| Timeline |
| GAMESTOP |
| ALGOMA STEEL GROUP |
GAMESTOP and ALGOMA STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and ALGOMA STEEL
The main advantage of trading using opposite GAMESTOP and ALGOMA STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, ALGOMA STEEL 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 ALGOMA STEEL will offset losses from the drop in ALGOMA STEEL's long position.| GAMESTOP vs. QBE Insurance Group | GAMESTOP vs. VIENNA INSURANCE GR | GAMESTOP vs. SBI Insurance Group | GAMESTOP vs. United Rentals |
| ALGOMA STEEL vs. GAMESTOP | ALGOMA STEEL vs. PennantPark Investment | ALGOMA STEEL vs. AOYAMA TRADING | ALGOMA STEEL vs. Keck Seng Investments |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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