Correlation Between Media and Games Workshop
Can any of the company-specific risk be diversified away by investing in both Media and Games Workshop 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 Media and Games Workshop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media and Games and Games Workshop Group, you can compare the effects of market volatilities on Media and Games Workshop 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 Media with a short position of Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media and Games Workshop.
Diversification Opportunities for Media and Games Workshop
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Media and Games is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games and Games Workshop Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Games Workshop Group and Media 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 Media and Games are associated (or correlated) with Games Workshop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Games Workshop Group has no effect on the direction of Media i.e., Media and Games Workshop go up and down completely randomly.
Pair Corralation between Media and Games Workshop
Assuming the 90 days trading horizon Media and Games is expected to generate 1.67 times more return on investment than Games Workshop. However, Media is 1.67 times more volatile than Games Workshop Group. It trades about 0.23 of its potential returns per unit of risk. Games Workshop Group is currently generating about 0.1 per unit of risk. If you would invest 304.00 in Media and Games on November 28, 2024 and sell it today you would earn a total of 35.00 from holding Media and Games or generate 11.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Media and Games vs. Games Workshop Group
Performance |
| Timeline |
| Media and Games |
| Games Workshop Group |
Media and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media and Games Workshop
The main advantage of trading using opposite Media and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media position performs unexpectedly, Games Workshop 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 Games Workshop will offset losses from the drop in Games Workshop's long position.| Media vs. Office Properties Income | Media vs. EMBARK EDUCATION LTD | Media vs. KENEDIX OFFICE INV | Media vs. Strategic Education |
| Games Workshop vs. LG Display Co | Games Workshop vs. GOLDQUEST MINING | Games Workshop vs. FIREWEED METALS P | Games Workshop vs. COLUMBIA SPORTSWEAR |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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