Correlation Between Games Workshop and Sydbank

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

Diversification Opportunities for Games Workshop and Sydbank

0.75

Correlation Coefficient

Games Workshop  Sydbank

Poor diversification

The 3 months correlation between Games and Sydbank is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Sydbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank 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 Sydbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank has no effect on the direction of Games Workshop i.e., Games Workshop and Sydbank go up and down completely randomly.

Pair Corralation between Games Workshop and Sydbank

Assuming the 90 days trading horizon Games Workshop Group is expected to generate 1.06 times more return on investment than Sydbank. However, Games Workshop is 1.06 times more volatile than Sydbank. It trades about 0.06 of its potential returns per unit of risk. Sydbank is currently generating about 0.05 per unit of risk. If you would invest  839,013  in Games Workshop Group on September 29, 2024 and sell it today you would earn a total of  477,987  from holding Games Workshop Group or generate 56.97% return on investment over 90 days.

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

Games Workshop Group  vs.  Sydbank

Games Workshop Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Games Workshop exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sydbank

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sydbank are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Sydbank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Games Workshop and Sydbank

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

The idea behind Games Workshop Group and Sydbank 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.