Correlation Between Games Workshop and Fidelity National

Can any of the company-specific risk be diversified away by investing in both Games Workshop and Fidelity National 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 Fidelity National 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 Fidelity National Information, you can compare the effects of market volatilities on Games Workshop and Fidelity National 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 Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Fidelity National.

Diversification Opportunities for Games Workshop and Fidelity National

-0.39

Correlation Coefficient

Games Workshop  Fidelity National

Very good diversification

The 3 months correlation between Games and Fidelity is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Games Workshop i.e., Games Workshop and Fidelity National go up and down completely randomly.

Pair Corralation between Games Workshop and Fidelity National

Assuming the 90 days trading horizon Games Workshop Group is expected to generate 1.72 times more return on investment than Fidelity National. However, Games Workshop is 1.72 times more volatile than Fidelity National Information. It trades about 0.07 of its potential returns per unit of risk. Fidelity National Information is currently generating about 0.11 per unit of risk. If you would invest  10,980  in Games Workshop Group on October 19, 2024 and sell it today you would earn a total of  4,410  from holding Games Workshop Group or generate 40.16% return on investment over 90 days.

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

Games Workshop Group  vs.  Fidelity National Information

Games Workshop Group

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 5 (%) 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 February 2025.

Fidelity National

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity National Information has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Games Workshop and Fidelity National

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

The idea behind Games Workshop Group and Fidelity National Information 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.