Correlation Between Games Workshop and Bilibili

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

Diversification Opportunities for Games Workshop and Bilibili

-0.23

Correlation Coefficient

Games Workshop  Bilibili

Very good diversification

The 3 months correlation between Games and Bilibili is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Bilibili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilibili 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 Bilibili. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilibili has no effect on the direction of Games Workshop i.e., Games Workshop and Bilibili go up and down completely randomly.

Pair Corralation between Games Workshop and Bilibili

Assuming the 90 days horizon Games Workshop Group is expected to generate 0.72 times more return on investment than Bilibili. However, Games Workshop Group is 1.39 times less risky than Bilibili. It trades about 0.08 of its potential returns per unit of risk. Bilibili is currently generating about -0.05 per unit of risk. If you would invest  15,726  in Games Workshop Group on October 24, 2024 and sell it today you would earn a total of  1,999  from holding Games Workshop Group or generate 12.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

Games Workshop Group  vs.  Bilibili

Games Workshop Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward-looking signals, Games Workshop reported solid returns over the last few months and may actually be approaching a breakup point.

Bilibili

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bilibili has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Games Workshop and Bilibili

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

The idea behind Games Workshop Group and Bilibili 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.