Correlation Between Banpu PCL and GAMESTOP

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

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

Diversification Opportunities for Banpu PCL and GAMESTOP

-0.72

Correlation Coefficient

Banpu PCL  GAMESTOP

Pay attention - limited upside

The 3 months correlation between Banpu and GAMESTOP is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Banpu PCL and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP and Banpu PCL 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 Banpu PCL are associated (or correlated) with GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of Banpu PCL i.e., Banpu PCL and GAMESTOP go up and down completely randomly.

Pair Corralation between Banpu PCL and GAMESTOP

Assuming the 90 days trading horizon Banpu PCL is expected to generate 13.38 times less return on investment than GAMESTOP. But when comparing it to its historical volatility, Banpu PCL is 1.25 times less risky than GAMESTOP. It trades about 0.0 of its potential returns per unit of risk. GAMESTOP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,537  in GAMESTOP on September 26, 2024 and sell it today you would earn a total of  1,414  from holding GAMESTOP or generate 92.0% return on investment over 90 days.

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

Banpu PCL  vs.  GAMESTOP

Banpu PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banpu PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

GAMESTOP

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GAMESTOP are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GAMESTOP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Banpu PCL and GAMESTOP

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

The idea behind Banpu PCL and GAMESTOP 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.