Correlation Between Gamehost and GameStop Corp

Can any of the company-specific risk be diversified away by investing in both Gamehost and GameStop Corp 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 Gamehost and GameStop Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gamehost and GameStop Corp, you can compare the effects of market volatilities on Gamehost and GameStop Corp 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 Gamehost with a short position of GameStop Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamehost and GameStop Corp.

Diversification Opportunities for Gamehost and GameStop Corp

-0.9

Correlation Coefficient

Gamehost  GameStop Corp

Pay attention - limited upside

The 3 months correlation between Gamehost and GameStop is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Gamehost and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp and Gamehost 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 Gamehost are associated (or correlated) with GameStop Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameStop Corp has no effect on the direction of Gamehost i.e., Gamehost and GameStop Corp go up and down completely randomly.

Pair Corralation between Gamehost and GameStop Corp

Assuming the 90 days horizon Gamehost is expected to generate 0.33 times more return on investment than GameStop Corp. However, Gamehost is 2.99 times less risky than GameStop Corp. It trades about 0.23 of its potential returns per unit of risk. GameStop Corp is currently generating about -0.17 per unit of risk. If you would invest  693.00  in Gamehost on October 23, 2024 and sell it today you would earn a total of  32.00  from holding Gamehost or generate 4.62% return on investment over 90 days.

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

Gamehost  vs.  GameStop Corp

Gamehost

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamehost has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

GameStop Corp

Risk-Adjusted Performance

11 of 100

OK

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

Pair Trading with Gamehost and GameStop Corp

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

The idea behind Gamehost and GameStop Corp 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..