Correlation Between GAMESTOP and CSL
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and CSL 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 CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and CSL Limited, you can compare the effects of market volatilities on GAMESTOP and CSL 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 CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and CSL.
Diversification Opportunities for GAMESTOP and CSL
Pay attention - limited upside
The 3 months correlation between GAMESTOP and CSL is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL Limited 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of GAMESTOP i.e., GAMESTOP and CSL go up and down completely randomly.
Pair Corralation between GAMESTOP and CSL
Assuming the 90 days trading horizon GAMESTOP is expected to generate 2.52 times more return on investment than CSL. However, GAMESTOP is 2.52 times more volatile than CSL Limited. It trades about 0.15 of its potential returns per unit of risk. CSL Limited is currently generating about -0.05 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. CSL Limited
Performance |
| Timeline |
| GAMESTOP |
| CSL Limited |
GAMESTOP and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and CSL
The main advantage of trading using opposite GAMESTOP and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.The idea behind GAMESTOP and CSL Limited 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.| CSL vs. Jacquet Metal Service | CSL vs. SLR Investment Corp | CSL vs. Virtus Investment Partners | CSL vs. Apollo Investment 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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