Correlation Between Games Workshop and Investment

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Investment 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 Games Workshop and Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Games Workshop Group and The Investment, you can compare the effects of market volatilities on Games Workshop and Investment 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 Games Workshop with a short position of Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Investment.

Diversification Opportunities for Games Workshop and Investment

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Games and Investment is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and The Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment and Games Workshop 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 Games Workshop Group are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment has no effect on the direction of Games Workshop i.e., Games Workshop and Investment go up and down completely randomly.

Pair Corralation between Games Workshop and Investment

Assuming the 90 days trading horizon Games Workshop Group is expected to generate 4.43 times more return on investment than Investment. However, Games Workshop is 4.43 times more volatile than The Investment. It trades about 0.21 of its potential returns per unit of risk. The Investment is currently generating about 0.06 per unit of risk. If you would invest  1,037,604  in Games Workshop Group on September 13, 2024 and sell it today you would earn a total of  377,396  from holding Games Workshop Group or generate 36.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Games Workshop Group  vs.  The Investment

 Performance 
       Timeline  
Games Workshop Group 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Games Workshop exhibited solid returns over the last few months and may actually be approaching a breakup point.
Investment 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in The Investment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Investment is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Games Workshop and Investment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Games Workshop and Investment

The main advantage of trading using opposite Games Workshop and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.
The idea behind Games Workshop Group and The Investment 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.
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

Other Complementary Tools

Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Global Correlations
Find global opportunities by holding instruments from different markets
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume