Correlation Between GameStop Corp and J Long

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

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

Diversification Opportunities for GameStop Corp and J Long

-0.54

Correlation Coefficient

GameStop Corp  J Long

Excellent diversification

The 3 months correlation between GameStop and J Long is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and J Long Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Long Group and GameStop Corp 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 GameStop Corp are associated (or correlated) with J Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Long Group has no effect on the direction of GameStop Corp i.e., GameStop Corp and J Long go up and down completely randomly.

Pair Corralation between GameStop Corp and J Long

Considering the 90-day investment horizon GameStop Corp is expected to generate 0.31 times more return on investment than J Long. However, GameStop Corp is 3.26 times less risky than J Long. It trades about 0.15 of its potential returns per unit of risk. J Long Group Limited is currently generating about 0.02 per unit of risk. If you would invest  2,263  in GameStop Corp on September 24, 2024 and sell it today you would earn a total of  827.00  from holding GameStop Corp or generate 36.54% return on investment over 90 days.

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

GameStop Corp  vs.  J Long Group Limited

GameStop Corp

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent primary indicators, GameStop Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

J Long Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in J Long Group Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain essential indicators, J Long disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GameStop Corp and J Long

The main advantage of trading using opposite GameStop Corp and J Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp position performs unexpectedly, J Long 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 J Long will offset losses from the drop in J Long's long position.

The idea behind GameStop Corp and J Long Group Limited 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 Stocks Directory module to find actively traded stocks across global markets.