Correlation Between CN YANGTPWR and GameStop Corp

Can any of the company-specific risk be diversified away by investing in both CN YANGTPWR 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 CN YANGTPWR and GameStop Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CN YANGTPWR GDR and GameStop Corp, you can compare the effects of market volatilities on CN YANGTPWR 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 CN YANGTPWR with a short position of GameStop Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN YANGTPWR and GameStop Corp.

Diversification Opportunities for CN YANGTPWR and GameStop Corp

-0.27

Correlation Coefficient

CN YANGTPWR  GameStop Corp

Very good diversification

The 3 months correlation between CYZB and GameStop is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding CN YANGTPWR GDR and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp and CN YANGTPWR 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 CN YANGTPWR GDR 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 CN YANGTPWR i.e., CN YANGTPWR and GameStop Corp go up and down completely randomly.

Pair Corralation between CN YANGTPWR and GameStop Corp

Assuming the 90 days trading horizon CN YANGTPWR is expected to generate 2.1 times less return on investment than GameStop Corp. In addition to that, CN YANGTPWR is 1.05 times more volatile than GameStop Corp. It trades about 0.09 of its total potential returns per unit of risk. GameStop Corp is currently generating about 0.19 per unit of volatility. If you would invest  1,972  in GameStop Corp on September 26, 2024 and sell it today you would earn a total of  998.00  from holding GameStop Corp or generate 50.61% return on investment over 90 days.

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

CN YANGTPWR GDR  vs.  GameStop Corp

CN YANGTPWR GDR

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CN YANGTPWR GDR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CN YANGTPWR reported solid returns over the last few months and may actually be approaching a breakup point.

GameStop Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GameStop Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CN YANGTPWR and GameStop Corp

The main advantage of trading using opposite CN YANGTPWR and GameStop Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN YANGTPWR 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.

The idea behind CN YANGTPWR GDR and GameStop Corp 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.