Correlation Between Games Workshop and Intermediate Capital

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

Diversification Opportunities for Games Workshop and Intermediate Capital

0.59

Correlation Coefficient

Games Workshop  Intermediate Capital

Very weak diversification

The 3 months correlation between Games and Intermediate is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital 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 Intermediate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Capital has no effect on the direction of Games Workshop i.e., Games Workshop and Intermediate Capital go up and down completely randomly.

Pair Corralation between Games Workshop and Intermediate Capital

Assuming the 90 days trading horizon Games Workshop Group is expected to generate 0.8 times more return on investment than Intermediate Capital. However, Games Workshop Group is 1.25 times less risky than Intermediate Capital. It trades about 0.11 of its potential returns per unit of risk. Intermediate Capital Group is currently generating about 0.01 per unit of risk. If you would invest  1,294,867  in Games Workshop Group on December 25, 2024 and sell it today you would earn a total of  141,133  from holding Games Workshop Group or generate 10.9% return on investment over 90 days.

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

Games Workshop Group  vs.  Intermediate Capital Group

Games Workshop Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Games Workshop may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Intermediate Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intermediate Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Intermediate Capital is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Games Workshop and Intermediate Capital

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

The idea behind Games Workshop Group and Intermediate Capital 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.