Correlation Between Games Workshop and Humatech

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

Diversification Opportunities for Games Workshop and Humatech

0.7

Correlation Coefficient

Games Workshop  Humatech

Poor diversification

The 3 months correlation between Games and Humatech is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Humatech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humatech 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 Humatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humatech has no effect on the direction of Games Workshop i.e., Games Workshop and Humatech go up and down completely randomly.

Pair Corralation between Games Workshop and Humatech

Assuming the 90 days horizon Games Workshop Group is expected to under-perform the Humatech. But the pink sheet apears to be less risky and, when comparing its historical volatility, Games Workshop Group is 139.78 times less risky than Humatech. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Humatech is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  0.18  in Humatech on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Humatech or generate 0.0% return on investment over 90 days.

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

Games Workshop Group  vs.  Humatech

Games Workshop Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 9 (%) 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.

Humatech

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with Games Workshop and Humatech

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

The idea behind Games Workshop Group and Humatech 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.