Correlation Between Games Workshop and World Houseware

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

Diversification Opportunities for Games Workshop and World Houseware

0.0

Correlation Coefficient

Games Workshop  World Houseware

Pay attention - limited upside

The 3 months correlation between Games and World is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and World Houseware Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Houseware 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 World Houseware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Houseware has no effect on the direction of Games Workshop i.e., Games Workshop and World Houseware go up and down completely randomly.

Pair Corralation between Games Workshop and World Houseware

If you would invest  16,800  in Games Workshop Group on December 20, 2024 and sell it today you would earn a total of  1,500  from holding Games Workshop Group or generate 8.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

Games Workshop Group  vs.  World Houseware Limited

Games Workshop Group

Risk-Adjusted Performance

Weak

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 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

World Houseware

Risk-Adjusted Performance

Very Weak

Over the last 90 days World Houseware Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, World Houseware is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Games Workshop and World Houseware

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

The idea behind Games Workshop Group and World Houseware Limited 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 Commodity Directory module to find actively traded commodities issued by global exchanges.