Correlation Between Games Workshop and Clarus Corp

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

Diversification Opportunities for Games Workshop and Clarus Corp

0.61

Correlation Coefficient

Games Workshop  Clarus Corp

Poor diversification

The 3 months correlation between Games and Clarus is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Clarus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarus Corp 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 Clarus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarus Corp has no effect on the direction of Games Workshop i.e., Games Workshop and Clarus Corp go up and down completely randomly.

Pair Corralation between Games Workshop and Clarus Corp

Assuming the 90 days horizon Games Workshop Group is expected to under-perform the Clarus Corp. In addition to that, Games Workshop is 2.77 times more volatile than Clarus Corp. It trades about 0.0 of its total potential returns per unit of risk. Clarus Corp is currently generating about 0.15 per unit of volatility. If you would invest  459.00  in Clarus Corp on October 26, 2024 and sell it today you would earn a total of  19.00  from holding Clarus Corp or generate 4.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

Games Workshop Group  vs.  Clarus Corp

Games Workshop Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal forward-looking signals, Games Workshop reported solid returns over the last few months and may actually be approaching a breakup point.

Clarus Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clarus Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Clarus Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Games Workshop and Clarus Corp

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

The idea behind Games Workshop Group and Clarus 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.