Correlation Between GAMESTOP and Takeda Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and Takeda Pharmaceutical 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 Takeda Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and Takeda Pharmaceutical, you can compare the effects of market volatilities on GAMESTOP and Takeda Pharmaceutical 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 Takeda Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and Takeda Pharmaceutical.
Diversification Opportunities for GAMESTOP and Takeda Pharmaceutical
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GAMESTOP and Takeda is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and Takeda Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takeda Pharmaceutical 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 Takeda Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takeda Pharmaceutical has no effect on the direction of GAMESTOP i.e., GAMESTOP and Takeda Pharmaceutical go up and down completely randomly.
Pair Corralation between GAMESTOP and Takeda Pharmaceutical
Assuming the 90 days trading horizon GAMESTOP is expected to generate 2.59 times more return on investment than Takeda Pharmaceutical. However, GAMESTOP is 2.59 times more volatile than Takeda Pharmaceutical. It trades about 0.13 of its potential returns per unit of risk. Takeda Pharmaceutical is currently generating about 0.06 per unit of risk. If you would invest 2,499 in GAMESTOP on September 14, 2024 and sell it today you would earn a total of 245.00 from holding GAMESTOP or generate 9.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMESTOP vs. Takeda Pharmaceutical
Performance |
| Timeline |
| GAMESTOP |
| Takeda Pharmaceutical |
GAMESTOP and Takeda Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and Takeda Pharmaceutical
The main advantage of trading using opposite GAMESTOP and Takeda Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, Takeda Pharmaceutical 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 Takeda Pharmaceutical will offset losses from the drop in Takeda Pharmaceutical's long position.The idea behind GAMESTOP and Takeda Pharmaceutical 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.| Takeda Pharmaceutical vs. GAMESTOP | Takeda Pharmaceutical vs. Uber Technologies | Takeda Pharmaceutical vs. THORNEY TECHS LTD | Takeda Pharmaceutical vs. TSOGO SUN GAMING |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |