Correlation Between GameStop Corp and 49326EEN9

Can any of the company-specific risk be diversified away by investing in both GameStop Corp and 49326EEN9 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 GameStop Corp and 49326EEN9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GameStop Corp and KEY 4789 01 JUN 33, you can compare the effects of market volatilities on GameStop Corp and 49326EEN9 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 GameStop Corp with a short position of 49326EEN9. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and 49326EEN9.

Diversification Opportunities for GameStop Corp and 49326EEN9

-0.45

Correlation Coefficient

GameStop Corp  49326EEN9

Very good diversification

The 3 months correlation between GameStop and 49326EEN9 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and KEY 4789 01 JUN 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEY 4789 01 and GameStop Corp 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 GameStop Corp are associated (or correlated) with 49326EEN9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEY 4789 01 has no effect on the direction of GameStop Corp i.e., GameStop Corp and 49326EEN9 go up and down completely randomly.

Pair Corralation between GameStop Corp and 49326EEN9

Considering the 90-day investment horizon GameStop Corp is expected to generate 1.15 times more return on investment than 49326EEN9. However, GameStop Corp is 1.15 times more volatile than KEY 4789 01 JUN 33. It trades about 0.18 of its potential returns per unit of risk. KEY 4789 01 JUN 33 is currently generating about -0.26 per unit of risk. If you would invest  2,793  in GameStop Corp on October 8, 2024 and sell it today you would earn a total of  372.00  from holding GameStop Corp or generate 13.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

GameStop Corp  vs.  KEY 4789 01 JUN 33

GameStop Corp

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 16 (%) 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.

KEY 4789 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KEY 4789 01 JUN 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for KEY 4789 01 JUN 33 investors.

Pair Trading with GameStop Corp and 49326EEN9

The main advantage of trading using opposite GameStop Corp and 49326EEN9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp position performs unexpectedly, 49326EEN9 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 49326EEN9 will offset losses from the drop in 49326EEN9's long position.

The idea behind GameStop Corp and KEY 4789 01 JUN 33 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.