Correlation Between GAMESTOP and Lion One
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and Lion One 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 Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and Lion One Metals, you can compare the effects of market volatilities on GAMESTOP and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and Lion One.
Diversification Opportunities for GAMESTOP and Lion One
Very good diversification
The 3 months correlation between GAMESTOP and Lion is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of GAMESTOP i.e., GAMESTOP and Lion One go up and down completely randomly.
Pair Corralation between GAMESTOP and Lion One
Assuming the 90 days trading horizon GAMESTOP is expected to generate 1.56 times more return on investment than Lion One. However, GAMESTOP is 1.56 times more volatile than Lion One Metals. It trades about 0.02 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.06 per unit of risk. If you would invest 2,912 in GAMESTOP on September 3, 2024 and sell it today you would lose (312.00) from holding GAMESTOP or give up 10.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMESTOP vs. Lion One Metals
Performance |
| Timeline |
| GAMESTOP |
| Lion One Metals |
GAMESTOP and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and Lion One
The main advantage of trading using opposite GAMESTOP and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| GAMESTOP vs. QBE Insurance Group | GAMESTOP vs. Canon Marketing Japan | GAMESTOP vs. CDN IMPERIAL BANK | GAMESTOP vs. The Hanover Insurance |
| Lion One vs. Cars Inc | Lion One vs. Chunghwa Telecom Co | Lion One vs. United Internet AG | Lion One vs. JAPAN TOBACCO UNSPADR12 |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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