Correlation Between Games Workshop and Silver Bullet
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Silver Bullet 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 Silver Bullet 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 Silver Bullet Data, you can compare the effects of market volatilities on Games Workshop and Silver Bullet 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 Silver Bullet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Silver Bullet.
Diversification Opportunities for Games Workshop and Silver Bullet
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Games and Silver is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Silver Bullet Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Bullet Data 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 Silver Bullet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Bullet Data has no effect on the direction of Games Workshop i.e., Games Workshop and Silver Bullet go up and down completely randomly.
Pair Corralation between Games Workshop and Silver Bullet
Assuming the 90 days trading horizon Games Workshop Group is expected to under-perform the Silver Bullet. But the stock apears to be less risky and, when comparing its historical volatility, Games Workshop Group is 2.61 times less risky than Silver Bullet. The stock trades about -0.04 of its potential returns per unit of risk. The Silver Bullet Data is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 5,450 in Silver Bullet Data on September 25, 2024 and sell it today you would earn a total of 800.00 from holding Silver Bullet Data or generate 14.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Games Workshop Group vs. Silver Bullet Data
Performance |
Timeline |
Games Workshop Group |
Silver Bullet Data |
Games Workshop and Silver Bullet Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Games Workshop and Silver Bullet
The main advantage of trading using opposite Games Workshop and Silver Bullet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Silver Bullet 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 Silver Bullet will offset losses from the drop in Silver Bullet's long position.Games Workshop vs. Samsung Electronics Co | Games Workshop vs. Samsung Electronics Co | Games Workshop vs. Toyota Motor Corp | Games Workshop vs. Hon Hai Precision |
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Check out your portfolio center.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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