Correlation Between GameStop Corp and MARRIOTT

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

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

Diversification Opportunities for GameStop Corp and MARRIOTT

-0.17

Correlation Coefficient

GameStop Corp  MARRIOTT

Good diversification

The 3 months correlation between GameStop and MARRIOTT is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and MARRIOTT INTERNATIONAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARRIOTT INTERNATIONAL 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 MARRIOTT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARRIOTT INTERNATIONAL has no effect on the direction of GameStop Corp i.e., GameStop Corp and MARRIOTT go up and down completely randomly.

Pair Corralation between GameStop Corp and MARRIOTT

Considering the 90-day investment horizon GameStop Corp is expected to generate 5.33 times more return on investment than MARRIOTT. However, GameStop Corp is 5.33 times more volatile than MARRIOTT INTERNATIONAL INC. It trades about 0.22 of its potential returns per unit of risk. MARRIOTT INTERNATIONAL INC is currently generating about -0.16 per unit of risk. If you would invest  2,273  in GameStop Corp on September 26, 2024 and sell it today you would earn a total of  841.00  from holding GameStop Corp or generate 37.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

GameStop Corp  vs.  MARRIOTT INTERNATIONAL INC

GameStop Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain primary indicators, GameStop Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

MARRIOTT INTERNATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARRIOTT INTERNATIONAL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for MARRIOTT INTERNATIONAL INC investors.

Pair Trading with GameStop Corp and MARRIOTT

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

The idea behind GameStop Corp and MARRIOTT INTERNATIONAL INC 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.