Correlation Between GAMESTOP and Sto SE
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and Sto SE 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 Sto SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and Sto SE Co, you can compare the effects of market volatilities on GAMESTOP and Sto SE 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 Sto SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and Sto SE.
Diversification Opportunities for GAMESTOP and Sto SE
Excellent diversification
The 3 months correlation between GAMESTOP and Sto is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and Sto SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sto SE 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 Sto SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sto SE has no effect on the direction of GAMESTOP i.e., GAMESTOP and Sto SE go up and down completely randomly.
Pair Corralation between GAMESTOP and Sto SE
Assuming the 90 days trading horizon GAMESTOP is expected to under-perform the Sto SE. In addition to that, GAMESTOP is 1.01 times more volatile than Sto SE Co. It trades about -0.2 of its total potential returns per unit of risk. Sto SE Co is currently generating about 0.25 per unit of volatility. If you would invest 10,780 in Sto SE Co on December 1, 2024 and sell it today you would earn a total of 1,760 from holding Sto SE Co or generate 16.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMESTOP vs. Sto SE Co
Performance |
| Timeline |
| GAMESTOP |
| Sto SE |
GAMESTOP and Sto SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and Sto SE
The main advantage of trading using opposite GAMESTOP and Sto SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, Sto SE 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 Sto SE will offset losses from the drop in Sto SE's long position.| GAMESTOP vs. CORNISH METALS INC | GAMESTOP vs. alstria office REIT AG | GAMESTOP vs. Infrastrutture Wireless Italiane | GAMESTOP vs. PARKEN SPORT ENT |
| Sto SE vs. ITALIAN WINE BRANDS | Sto SE vs. CHINA TONTINE WINES | Sto SE vs. BURLINGTON STORES | Sto SE vs. SIEM OFFSHORE NEW |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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