Correlation Between GameStop Corp and John Wiley

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

By analyzing existing cross correlation between GameStop Corp and John Wiley Sons, you can compare the effects of market volatilities on GameStop Corp and John Wiley 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 John Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and John Wiley.

Diversification Opportunities for GameStop Corp and John Wiley

0.26

Correlation Coefficient

GameStop Corp  John Wiley

Modest diversification

The 3 months correlation between GameStop and John is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and John Wiley Sons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Wiley Sons 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 John Wiley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Wiley Sons has no effect on the direction of GameStop Corp i.e., GameStop Corp and John Wiley go up and down completely randomly.

Pair Corralation between GameStop Corp and John Wiley

Considering the 90-day investment horizon GameStop Corp is expected to generate 162.24 times less return on investment than John Wiley. But when comparing it to its historical volatility, GameStop Corp is 47.57 times less risky than John Wiley. It trades about 0.05 of its potential returns per unit of risk. John Wiley Sons is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  3,875  in John Wiley Sons on September 14, 2024 and sell it today you would earn a total of  801.00  from holding John Wiley Sons or generate 20.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	78.4%
Values	Daily Returns

GameStop Corp  vs.  John Wiley Sons

GameStop Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain primary indicators, GameStop Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

John Wiley Sons

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in John Wiley Sons are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, John Wiley is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GameStop Corp and John Wiley

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

The idea behind GameStop Corp and John Wiley Sons 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.