Correlation Between Games Workshop and Spyre Therapeutics

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

Diversification Opportunities for Games Workshop and Spyre Therapeutics

-0.47

Correlation Coefficient

Games Workshop  Spyre Therapeutics

Very good diversification

The 3 months correlation between Games and Spyre is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Spyre Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spyre Therapeutics 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 Spyre Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spyre Therapeutics has no effect on the direction of Games Workshop i.e., Games Workshop and Spyre Therapeutics go up and down completely randomly.

Pair Corralation between Games Workshop and Spyre Therapeutics

Assuming the 90 days horizon Games Workshop Group is expected to generate 0.4 times more return on investment than Spyre Therapeutics. However, Games Workshop Group is 2.52 times less risky than Spyre Therapeutics. It trades about -0.3 of its potential returns per unit of risk. Spyre Therapeutics is currently generating about -0.12 per unit of risk. If you would invest  18,300  in Games Workshop Group on October 8, 2024 and sell it today you would lose (1,500) from holding Games Workshop Group or give up 8.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Games Workshop Group  vs.  Spyre Therapeutics

Games Workshop Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 8 (%) 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.

Spyre Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spyre Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Games Workshop and Spyre Therapeutics

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

The idea behind Games Workshop Group and Spyre Therapeutics 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..