Correlation Between TROPHY GAMES and Games Workshop

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

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

Diversification Opportunities for TROPHY GAMES and Games Workshop

0.57

Correlation Coefficient

TROPHY GAMES  Games Workshop

Very weak diversification

The 3 months correlation between TROPHY and Games is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding TROPHY GAMES DEV 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 TROPHY GAMES 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 TROPHY GAMES DEV 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 TROPHY GAMES i.e., TROPHY GAMES and Games Workshop go up and down completely randomly.

Pair Corralation between TROPHY GAMES and Games Workshop

Assuming the 90 days horizon TROPHY GAMES DEV is expected to generate 1.63 times more return on investment than Games Workshop. However, TROPHY GAMES is 1.63 times more volatile than Games Workshop Group. It trades about 0.09 of its potential returns per unit of risk. Games Workshop Group is currently generating about 0.09 per unit of risk. If you would invest  78.00  in TROPHY GAMES DEV on December 29, 2024 and sell it today you would earn a total of  11.00  from holding TROPHY GAMES DEV or generate 14.1% return on investment over 90 days.

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

TROPHY GAMES DEV  vs.  Games Workshop Group

TROPHY GAMES DEV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TROPHY GAMES DEV are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TROPHY GAMES reported solid returns over the last few months and may actually be approaching a breakup point.

Games Workshop Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Games Workshop may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with TROPHY GAMES and Games Workshop

The main advantage of trading using opposite TROPHY GAMES and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TROPHY GAMES 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 TROPHY GAMES DEV 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.