Correlation Between Retail Estates and GameStop Corp
Can any of the company-specific risk be diversified away by investing in both Retail Estates and GameStop Corp 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 Retail Estates and GameStop Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates NV and GameStop Corp, you can compare the effects of market volatilities on Retail Estates and GameStop Corp 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 Retail Estates with a short position of GameStop Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and GameStop Corp.
Diversification Opportunities for Retail Estates and GameStop Corp
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Retail and GameStop is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp and Retail Estates 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 Retail Estates NV are associated (or correlated) with GameStop Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameStop Corp has no effect on the direction of Retail Estates i.e., Retail Estates and GameStop Corp go up and down completely randomly.
Pair Corralation between Retail Estates and GameStop Corp
Assuming the 90 days horizon Retail Estates NV is expected to under-perform the GameStop Corp. But the stock apears to be less risky and, when comparing its historical volatility, Retail Estates NV is 3.67 times less risky than GameStop Corp. The stock trades about -0.26 of its potential returns per unit of risk. The GameStop Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,976 in GameStop Corp on August 28, 2024 and sell it today you would earn a total of 664.00 from holding GameStop Corp or generate 33.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates NV vs. GameStop Corp
Performance |
| Timeline |
| Retail Estates NV |
| GameStop Corp |
Retail Estates and GameStop Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and GameStop Corp
The main advantage of trading using opposite Retail Estates and GameStop Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, GameStop Corp 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 GameStop Corp will offset losses from the drop in GameStop Corp's long position.| Retail Estates vs. GAMING FAC SA | Retail Estates vs. Media and Games | Retail Estates vs. EAST SIDE GAMES | Retail Estates vs. CI GAMES SA |
| GameStop Corp vs. DELTA AIR LINES | GameStop Corp vs. SOFI TECHNOLOGIES | GameStop Corp vs. GLG LIFE TECH | GameStop Corp vs. Air New Zealand |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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