Correlation Between Games Workshop and Mindflair Plc

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

Diversification Opportunities for Games Workshop and Mindflair Plc

0.43

Correlation Coefficient

Games Workshop  Mindflair Plc

Very weak diversification

The 3 months correlation between Games and Mindflair is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Mindflair Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindflair Plc 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 Mindflair Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindflair Plc has no effect on the direction of Games Workshop i.e., Games Workshop and Mindflair Plc go up and down completely randomly.

Pair Corralation between Games Workshop and Mindflair Plc

Assuming the 90 days trading horizon Games Workshop is expected to generate 7.1 times less return on investment than Mindflair Plc. But when comparing it to its historical volatility, Games Workshop Group is 8.49 times less risky than Mindflair Plc. It trades about 0.12 of its potential returns per unit of risk. Mindflair Plc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  63.00  in Mindflair Plc on December 24, 2024 and sell it today you would earn a total of  31.00  from holding Mindflair Plc or generate 49.21% 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.  Mindflair Plc

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 9 (%) 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.

Mindflair Plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mindflair Plc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Mindflair Plc unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Games Workshop and Mindflair Plc

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

The idea behind Games Workshop Group and Mindflair Plc 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.