Correlation Between Global Ship and Games Workshop

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

By analyzing existing cross correlation between Global Ship Lease and Games Workshop Group, you can compare the effects of market volatilities on Global Ship and Games Workshop 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 Global Ship with a short position of Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Games Workshop.

Diversification Opportunities for Global Ship and Games Workshop

-0.87

Correlation Coefficient

Global Ship  Games Workshop

Pay attention - limited upside

The 3 months correlation between Global and Games is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Games Workshop Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Games Workshop Group and Global Ship 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 Global Ship Lease are associated (or correlated) with Games Workshop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Games Workshop Group has no effect on the direction of Global Ship i.e., Global Ship and Games Workshop go up and down completely randomly.

Pair Corralation between Global Ship and Games Workshop

Assuming the 90 days horizon Global Ship Lease is expected to generate 0.83 times more return on investment than Games Workshop. However, Global Ship Lease is 1.21 times less risky than Games Workshop. It trades about -0.01 of its potential returns per unit of risk. Games Workshop Group is currently generating about -0.16 per unit of risk. If you would invest  2,082  in Global Ship Lease on October 4, 2024 and sell it today you would lose (6.00) from holding Global Ship Lease or give up 0.29% of portfolio value over 90 days.

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

Global Ship Lease  vs.  Games Workshop Group

Global Ship Lease

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Ship Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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.

Games Workshop Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Games Workshop unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Ship and Games Workshop

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

The idea behind Global Ship Lease and Games Workshop 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.