Correlation Between SPORTING and GAMESTOP
Can any of the company-specific risk be diversified away by investing in both SPORTING and GAMESTOP 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 SPORTING and GAMESTOP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORTING and GAMESTOP, you can compare the effects of market volatilities on SPORTING and GAMESTOP 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 SPORTING with a short position of GAMESTOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORTING and GAMESTOP.
Diversification Opportunities for SPORTING and GAMESTOP
Average diversification
The 3 months correlation between SPORTING and GAMESTOP is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP and SPORTING 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 SPORTING are associated (or correlated) with GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of SPORTING i.e., SPORTING and GAMESTOP go up and down completely randomly.
Pair Corralation between SPORTING and GAMESTOP
Assuming the 90 days trading horizon SPORTING is expected to generate 10.32 times less return on investment than GAMESTOP. But when comparing it to its historical volatility, SPORTING is 2.57 times less risky than GAMESTOP. It trades about 0.05 of its potential returns per unit of risk. GAMESTOP is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,942 in GAMESTOP on September 20, 2024 and sell it today you would earn a total of 1,048 from holding GAMESTOP or generate 53.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORTING vs. GAMESTOP
Performance |
| Timeline |
| SPORTING |
| GAMESTOP |
SPORTING and GAMESTOP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORTING and GAMESTOP
The main advantage of trading using opposite SPORTING and GAMESTOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING position performs unexpectedly, GAMESTOP 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 will offset losses from the drop in GAMESTOP's long position.The idea behind SPORTING and GAMESTOP 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.| GAMESTOP vs. EHEALTH | GAMESTOP vs. SPORTING | GAMESTOP vs. Bausch Health Companies | GAMESTOP vs. GUARDANT HEALTH CL |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |