Correlation Between MYFAIR GOLD and Games Workshop

Can any of the company-specific risk be diversified away by investing in both MYFAIR GOLD 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 MYFAIR GOLD and Games Workshop into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MYFAIR GOLD P and Games Workshop Group, you can compare the effects of market volatilities on MYFAIR GOLD 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 MYFAIR GOLD with a short position of Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYFAIR GOLD and Games Workshop.

Diversification Opportunities for MYFAIR GOLD and Games Workshop

-0.26

Correlation Coefficient

MYFAIR GOLD  Games Workshop

Very good diversification

The 3 months correlation between MYFAIR and Games is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding MYFAIR GOLD P 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 MYFAIR GOLD 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 MYFAIR GOLD P 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 MYFAIR GOLD i.e., MYFAIR GOLD and Games Workshop go up and down completely randomly.

Pair Corralation between MYFAIR GOLD and Games Workshop

Assuming the 90 days horizon MYFAIR GOLD is expected to generate 20.17 times less return on investment than Games Workshop. In addition to that, MYFAIR GOLD is 1.32 times more volatile than Games Workshop Group. It trades about 0.0 of its total potential returns per unit of risk. Games Workshop Group is currently generating about 0.13 per unit of volatility. If you would invest  12,526  in Games Workshop Group on September 24, 2024 and sell it today you would earn a total of  3,164  from holding Games Workshop Group or generate 25.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MYFAIR GOLD P  vs.  Games Workshop Group

MYFAIR GOLD P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MYFAIR GOLD P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MYFAIR GOLD is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Games Workshop Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Games Workshop unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MYFAIR GOLD and Games Workshop

The main advantage of trading using opposite MYFAIR GOLD and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYFAIR GOLD 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.

The idea behind MYFAIR GOLD P and Games Workshop Group 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.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.