Correlation Between GAMESTOP and UNITED UTILITIES
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and UNITED UTILITIES 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 UNITED UTILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and UNITED UTILITIES GR, you can compare the effects of market volatilities on GAMESTOP and UNITED UTILITIES 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 UNITED UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and UNITED UTILITIES.
Diversification Opportunities for GAMESTOP and UNITED UTILITIES
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GAMESTOP and UNITED is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and UNITED UTILITIES GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED UTILITIES 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 UNITED UTILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED UTILITIES has no effect on the direction of GAMESTOP i.e., GAMESTOP and UNITED UTILITIES go up and down completely randomly.
Pair Corralation between GAMESTOP and UNITED UTILITIES
Assuming the 90 days trading horizon GAMESTOP is expected to generate 2.08 times more return on investment than UNITED UTILITIES. However, GAMESTOP is 2.08 times more volatile than UNITED UTILITIES GR. It trades about -0.08 of its potential returns per unit of risk. UNITED UTILITIES GR is currently generating about -0.24 per unit of risk. If you would invest 2,825 in GAMESTOP on October 20, 2024 and sell it today you would lose (186.00) from holding GAMESTOP or give up 6.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMESTOP vs. UNITED UTILITIES GR
Performance |
| Timeline |
| GAMESTOP |
| UNITED UTILITIES |
GAMESTOP and UNITED UTILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and UNITED UTILITIES
The main advantage of trading using opposite GAMESTOP and UNITED UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, UNITED UTILITIES 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 UNITED UTILITIES will offset losses from the drop in UNITED UTILITIES's long position.| GAMESTOP vs. SOUTHWEST AIRLINES | GAMESTOP vs. JAPAN AIRLINES | GAMESTOP vs. Air Lease | GAMESTOP vs. SINGAPORE AIRLINES |
| UNITED UTILITIES vs. Sims Metal Management | UNITED UTILITIES vs. Platinum Investment Management | UNITED UTILITIES vs. Ribbon Communications | UNITED UTILITIES vs. Highlight Communications AG |
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 Stocks Directory module to find actively traded stocks across global markets.
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