Correlation Between GAMESTOP and CARGOJET INC
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and CARGOJET INC 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 CARGOJET INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and CARGOJET INC VAR, you can compare the effects of market volatilities on GAMESTOP and CARGOJET INC 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 CARGOJET INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and CARGOJET INC.
Diversification Opportunities for GAMESTOP and CARGOJET INC
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GAMESTOP and CARGOJET is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and CARGOJET INC VAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARGOJET INC VAR 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 CARGOJET INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARGOJET INC VAR has no effect on the direction of GAMESTOP i.e., GAMESTOP and CARGOJET INC go up and down completely randomly.
Pair Corralation between GAMESTOP and CARGOJET INC
Assuming the 90 days trading horizon GAMESTOP is expected to generate 2.86 times more return on investment than CARGOJET INC. However, GAMESTOP is 2.86 times more volatile than CARGOJET INC VAR. It trades about 0.15 of its potential returns per unit of risk. CARGOJET INC VAR is currently generating about -0.65 per unit of risk. If you would invest 2,467 in GAMESTOP on September 13, 2024 and sell it today you would earn a total of 286.00 from holding GAMESTOP or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMESTOP vs. CARGOJET INC VAR
Performance |
| Timeline |
| GAMESTOP |
| CARGOJET INC VAR |
GAMESTOP and CARGOJET INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and CARGOJET INC
The main advantage of trading using opposite GAMESTOP and CARGOJET INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, CARGOJET INC 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 CARGOJET INC will offset losses from the drop in CARGOJET INC's long position.The idea behind GAMESTOP and CARGOJET INC VAR 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.| CARGOJET INC vs. Lifeway Foods | CARGOJET INC vs. Austevoll Seafood ASA | CARGOJET INC vs. CN MODERN DAIRY | CARGOJET INC vs. Food Life Companies |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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