Correlation Between PDS Biotechnology and GAMESTOP

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

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

Diversification Opportunities for PDS Biotechnology and GAMESTOP

-0.9

Correlation Coefficient

PDS Biotechnology  GAMESTOP

Pay attention - limited upside

The 3 months correlation between PDS and GAMESTOP is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding PDS Biotechnology Corp and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP and PDS Biotechnology 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 PDS Biotechnology Corp 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 PDS Biotechnology i.e., PDS Biotechnology and GAMESTOP go up and down completely randomly.

Pair Corralation between PDS Biotechnology and GAMESTOP

Assuming the 90 days horizon PDS Biotechnology Corp is expected to under-perform the GAMESTOP. In addition to that, PDS Biotechnology is 1.15 times more volatile than GAMESTOP. It trades about -0.25 of its total potential returns per unit of risk. GAMESTOP is currently generating about 0.32 per unit of volatility. If you would invest  2,567  in GAMESTOP on October 11, 2024 and sell it today you would earn a total of  613.00  from holding GAMESTOP or generate 23.88% return on investment over 90 days.

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

PDS Biotechnology Corp  vs.  GAMESTOP

PDS Biotechnology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PDS Biotechnology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

GAMESTOP

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GAMESTOP are ranked lower than 19 (%) 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 PDS Biotechnology and GAMESTOP

The main advantage of trading using opposite PDS Biotechnology and GAMESTOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PDS Biotechnology 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 PDS Biotechnology Corp 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.