Correlation Between GAMESTOP and GALP ENERGIA
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and GALP ENERGIA 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 GALP ENERGIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and GALP ENERGIA B , you can compare the effects of market volatilities on GAMESTOP and GALP ENERGIA 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 GALP ENERGIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and GALP ENERGIA.
Diversification Opportunities for GAMESTOP and GALP ENERGIA
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GAMESTOP and GALP is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and GALP ENERGIA B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GALP ENERGIA B 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 GALP ENERGIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GALP ENERGIA B has no effect on the direction of GAMESTOP i.e., GAMESTOP and GALP ENERGIA go up and down completely randomly.
Pair Corralation between GAMESTOP and GALP ENERGIA
Assuming the 90 days trading horizon GAMESTOP is expected to generate 1.14 times less return on investment than GALP ENERGIA. In addition to that, GAMESTOP is 2.38 times more volatile than GALP ENERGIA B . It trades about 0.08 of its total potential returns per unit of risk. GALP ENERGIA B is currently generating about 0.23 per unit of volatility. If you would invest 1,539 in GALP ENERGIA B on September 17, 2024 and sell it today you would earn a total of 116.00 from holding GALP ENERGIA B or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMESTOP vs. GALP ENERGIA B
Performance |
| Timeline |
| GAMESTOP |
| GALP ENERGIA B |
GAMESTOP and GALP ENERGIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and GALP ENERGIA
The main advantage of trading using opposite GAMESTOP and GALP ENERGIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, GALP ENERGIA 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 GALP ENERGIA will offset losses from the drop in GALP ENERGIA's long position.The idea behind GAMESTOP and GALP ENERGIA B 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.| GALP ENERGIA vs. PLAYMATES TOYS | GALP ENERGIA vs. TSOGO SUN GAMING | GALP ENERGIA vs. KIMBALL ELECTRONICS | GALP ENERGIA vs. GAMESTOP |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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