Correlation Between Games Workshop and Société Générale

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

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

Diversification Opportunities for Games Workshop and Société Générale

0.34

Correlation Coefficient

Games Workshop  Société Générale

Weak diversification

The 3 months correlation between Games and Société is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit and Games Workshop 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 Games Workshop Group are associated (or correlated) with Société Générale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of Games Workshop i.e., Games Workshop and Société Générale go up and down completely randomly.

Pair Corralation between Games Workshop and Société Générale

Assuming the 90 days trading horizon Games Workshop Group is expected to under-perform the Société Générale. In addition to that, Games Workshop is 1.19 times more volatile than Socit Gnrale Socit. It trades about -0.16 of its total potential returns per unit of risk. Socit Gnrale Socit is currently generating about 0.46 per unit of volatility. If you would invest  2,428  in Socit Gnrale Socit on October 4, 2024 and sell it today you would earn a total of  283.00  from holding Socit Gnrale Socit or generate 11.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Games Workshop Group  vs.  Socit Gnrale Socit

Games Workshop Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Games Workshop unveiled solid returns over the last few months and may actually be approaching a breakup point.

Socit Gnrale Socit

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Socit Gnrale Socit are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Société Générale unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Games Workshop and Société Générale

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

The idea behind Games Workshop Group and Socit Gnrale Socit 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.