Correlation Between Games Workshop and 302635AK3

Can any of the company-specific risk be diversified away by investing in both Games Workshop and 302635AK3 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 302635AK3 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 FSK 3125 12 OCT 28, you can compare the effects of market volatilities on Games Workshop and 302635AK3 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 302635AK3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and 302635AK3.

Diversification Opportunities for Games Workshop and 302635AK3

0.56

Correlation Coefficient

Games Workshop  302635AK3

Very weak diversification

The 3 months correlation between Games and 302635AK3 is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and FSK 3125 12 OCT 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSK 3125 12 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 302635AK3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSK 3125 12 has no effect on the direction of Games Workshop i.e., Games Workshop and 302635AK3 go up and down completely randomly.

Pair Corralation between Games Workshop and 302635AK3

Assuming the 90 days horizon Games Workshop Group is expected to generate 3.63 times more return on investment than 302635AK3. However, Games Workshop is 3.63 times more volatile than FSK 3125 12 OCT 28. It trades about 0.08 of its potential returns per unit of risk. FSK 3125 12 OCT 28 is currently generating about -0.01 per unit of risk. If you would invest  13,500  in Games Workshop Group on October 8, 2024 and sell it today you would earn a total of  3,300  from holding Games Workshop Group or generate 24.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

Games Workshop Group  vs.  FSK 3125 12 OCT 28

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.

FSK 3125 12

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FSK 3125 12 OCT 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 302635AK3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Games Workshop and 302635AK3

The main advantage of trading using opposite Games Workshop and 302635AK3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, 302635AK3 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 302635AK3 will offset losses from the drop in 302635AK3's long position.

The idea behind Games Workshop Group and FSK 3125 12 OCT 28 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.