Correlation Between GAMESTOP and CHINA CONBANK
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and CHINA CONBANK 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 CHINA CONBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and CHINA BANK ADR20, you can compare the effects of market volatilities on GAMESTOP and CHINA CONBANK 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 CHINA CONBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and CHINA CONBANK.
Diversification Opportunities for GAMESTOP and CHINA CONBANK
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GAMESTOP and CHINA is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and CHINA BANK ADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA BANK ADR20 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 CHINA CONBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA BANK ADR20 has no effect on the direction of GAMESTOP i.e., GAMESTOP and CHINA CONBANK go up and down completely randomly.
Pair Corralation between GAMESTOP and CHINA CONBANK
Assuming the 90 days trading horizon GAMESTOP is expected to generate 3.78 times more return on investment than CHINA CONBANK. However, GAMESTOP is 3.78 times more volatile than CHINA BANK ADR20. It trades about 0.04 of its potential returns per unit of risk. CHINA BANK ADR20 is currently generating about 0.05 per unit of risk. If you would invest 1,999 in GAMESTOP on September 3, 2024 and sell it today you would earn a total of 703.00 from holding GAMESTOP or generate 35.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMESTOP vs. CHINA BANK ADR20
Performance |
| Timeline |
| GAMESTOP |
| CHINA BANK ADR20 |
GAMESTOP and CHINA CONBANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and CHINA CONBANK
The main advantage of trading using opposite GAMESTOP and CHINA CONBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, CHINA CONBANK 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 CHINA CONBANK will offset losses from the drop in CHINA CONBANK's long position.| GAMESTOP vs. QBE Insurance Group | GAMESTOP vs. Canon Marketing Japan | GAMESTOP vs. CDN IMPERIAL BANK | GAMESTOP vs. The Hanover Insurance |
| CHINA CONBANK vs. KOOL2PLAY SA ZY | CHINA CONBANK vs. SYSTEMAIR AB | CHINA CONBANK vs. Playtech plc | CHINA CONBANK vs. Air New Zealand |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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