Correlation Between GAMESTOP and JINHUI SHIPPING
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and JINHUI SHIPPING 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 JINHUI SHIPPING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and JINHUI SHIPPING, you can compare the effects of market volatilities on GAMESTOP and JINHUI SHIPPING 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 JINHUI SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and JINHUI SHIPPING.
Diversification Opportunities for GAMESTOP and JINHUI SHIPPING
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GAMESTOP and JINHUI is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and JINHUI SHIPPING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JINHUI SHIPPING 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 JINHUI SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JINHUI SHIPPING has no effect on the direction of GAMESTOP i.e., GAMESTOP and JINHUI SHIPPING go up and down completely randomly.
Pair Corralation between GAMESTOP and JINHUI SHIPPING
Assuming the 90 days trading horizon GAMESTOP is expected to generate 3.72 times more return on investment than JINHUI SHIPPING. However, GAMESTOP is 3.72 times more volatile than JINHUI SHIPPING. It trades about 0.07 of its potential returns per unit of risk. JINHUI SHIPPING is currently generating about 0.02 per unit of risk. If you would invest 1,170 in GAMESTOP on September 14, 2024 and sell it today you would earn a total of 1,574 from holding GAMESTOP or generate 134.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMESTOP vs. JINHUI SHIPPING
Performance |
| Timeline |
| GAMESTOP |
| JINHUI SHIPPING |
GAMESTOP and JINHUI SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and JINHUI SHIPPING
The main advantage of trading using opposite GAMESTOP and JINHUI SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, JINHUI SHIPPING 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 JINHUI SHIPPING will offset losses from the drop in JINHUI SHIPPING's long position.The idea behind GAMESTOP and JINHUI SHIPPING 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.| JINHUI SHIPPING vs. MCEWEN MINING INC | JINHUI SHIPPING vs. GAMESTOP | JINHUI SHIPPING vs. GALENA MINING LTD | JINHUI SHIPPING vs. Hochschild Mining plc |
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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