Correlation Between CHINA TONTINE and Games Workshop

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

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

Diversification Opportunities for CHINA TONTINE and Games Workshop

0.0

Correlation Coefficient

CHINA TONTINE  Games Workshop

Pay attention - limited upside

The 3 months correlation between CHINA and Games is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TONTINE WINES 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 CHINA TONTINE 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 CHINA TONTINE WINES 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 CHINA TONTINE i.e., CHINA TONTINE and Games Workshop go up and down completely randomly.

Pair Corralation between CHINA TONTINE and Games Workshop

Assuming the 90 days trading horizon CHINA TONTINE WINES is expected to generate 20.93 times more return on investment than Games Workshop. However, CHINA TONTINE is 20.93 times more volatile than Games Workshop Group. It trades about 0.05 of its potential returns per unit of risk. Games Workshop Group is currently generating about 0.04 per unit of risk. If you would invest  0.70  in CHINA TONTINE WINES on September 30, 2024 and sell it today you would earn a total of  6.30  from holding CHINA TONTINE WINES or generate 900.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.73%
Values	Daily Returns

CHINA TONTINE WINES  vs.  Games Workshop Group

CHINA TONTINE WINES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHINA TONTINE WINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, CHINA TONTINE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 fragile basic indicators, Games Workshop unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CHINA TONTINE and Games Workshop

The main advantage of trading using opposite CHINA TONTINE and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TONTINE 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 CHINA TONTINE WINES 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..