Correlation Between Integral and GameStop Corp

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

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

Diversification Opportunities for Integral and GameStop Corp

0.02

Correlation Coefficient

Integral  GameStop Corp

Significant diversification

The 3 months correlation between Integral and GameStop is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp and Integral 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 Integral Ad Science 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 Integral i.e., Integral and GameStop Corp go up and down completely randomly.

Pair Corralation between Integral and GameStop Corp

Considering the 90-day investment horizon Integral Ad Science is expected to under-perform the GameStop Corp. But the stock apears to be less risky and, when comparing its historical volatility, Integral Ad Science is 1.29 times less risky than GameStop Corp. The stock trades about -0.02 of its potential returns per unit of risk. The GameStop Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,229  in GameStop Corp on September 26, 2024 and sell it today you would earn a total of  885.00  from holding GameStop Corp or generate 39.7% return on investment over 90 days.

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

Integral Ad Science  vs.  GameStop Corp

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Integral and GameStop Corp

The main advantage of trading using opposite Integral and GameStop Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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 Integral Ad Science 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..