Correlation Between Games Workshop and Ouster, Warrants

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

Diversification Opportunities for Games Workshop and Ouster, Warrants

-0.08

Correlation Coefficient

Games Workshop  Ouster, Warrants

Good diversification

The 3 months correlation between Games and Ouster, is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Ouster, Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ouster, Warrants 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 Ouster, Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ouster, Warrants has no effect on the direction of Games Workshop i.e., Games Workshop and Ouster, Warrants go up and down completely randomly.

Pair Corralation between Games Workshop and Ouster, Warrants

Assuming the 90 days horizon Games Workshop is expected to generate 22.49 times less return on investment than Ouster, Warrants. But when comparing it to its historical volatility, Games Workshop Group is 7.04 times less risky than Ouster, Warrants. It trades about 0.05 of its potential returns per unit of risk. Ouster, Warrants is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  8.99  in Ouster, Warrants on October 25, 2024 and sell it today you would earn a total of  2.01  from holding Ouster, Warrants or generate 22.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	55.26%
Values	Daily Returns

Games Workshop Group  vs.  Ouster, Warrants

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 abnormal forward-looking signals, Games Workshop reported solid returns over the last few months and may actually be approaching a breakup point.

Ouster, Warrants

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ouster, Warrants are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Ouster, Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Games Workshop and Ouster, Warrants

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

The idea behind Games Workshop Group and Ouster, Warrants 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.