Correlation Between GameStop Corp and FRACTAL GAMING

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

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

Diversification Opportunities for GameStop Corp and FRACTAL GAMING

-0.8

Correlation Coefficient

GameStop Corp  FRACTAL GAMING

Pay attention - limited upside

The 3 months correlation between GameStop and FRACTAL is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and FRACTAL GAMING GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRACTAL GAMING 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 FRACTAL GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRACTAL GAMING GROUP has no effect on the direction of GameStop Corp i.e., GameStop Corp and FRACTAL GAMING go up and down completely randomly.

Pair Corralation between GameStop Corp and FRACTAL GAMING

Assuming the 90 days trading horizon GameStop Corp is expected to generate 2.73 times more return on investment than FRACTAL GAMING. However, GameStop Corp is 2.73 times more volatile than FRACTAL GAMING GROUP. It trades about 0.51 of its potential returns per unit of risk. FRACTAL GAMING GROUP is currently generating about -0.26 per unit of risk. If you would invest  2,018  in GameStop Corp on September 1, 2024 and sell it today you would earn a total of  907.00  from holding GameStop Corp or generate 44.95% return on investment over 90 days.

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

GameStop Corp  vs.  FRACTAL GAMING GROUP

GameStop Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 10 (%) 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.

FRACTAL GAMING GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GameStop Corp and FRACTAL GAMING

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

The idea behind GameStop Corp and FRACTAL GAMING 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.