Correlation Between GameStop Corp and WPP -

Can any of the company-specific risk be diversified away by investing in both GameStop Corp and WPP - 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 GameStop Corp and WPP - into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GameStop Corp and WPP Dusseldorf, you can compare the effects of market volatilities on GameStop Corp and WPP - 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 GameStop Corp with a short position of WPP -. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and WPP -.

Diversification Opportunities for GameStop Corp and WPP -

0.02

Correlation Coefficient

GameStop Corp  WPP -

Significant diversification

The 3 months correlation between GameStop and WPP is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and WPP Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WPP Dusseldorf and GameStop Corp 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 GameStop Corp are associated (or correlated) with WPP -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WPP Dusseldorf has no effect on the direction of GameStop Corp i.e., GameStop Corp and WPP - go up and down completely randomly.

Pair Corralation between GameStop Corp and WPP -

Assuming the 90 days trading horizon GameStop Corp is expected to generate 2.76 times more return on investment than WPP -. However, GameStop Corp is 2.76 times more volatile than WPP Dusseldorf. It trades about 0.16 of its potential returns per unit of risk. WPP Dusseldorf is currently generating about -0.12 per unit of risk. If you would invest  1,900  in GameStop Corp on October 23, 2024 and sell it today you would earn a total of  756.00  from holding GameStop Corp or generate 39.79% return on investment over 90 days.

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

GameStop Corp  vs.  WPP Dusseldorf

GameStop Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GameStop Corp reported solid returns over the last few months and may actually be approaching a breakup point.

WPP Dusseldorf

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WPP Dusseldorf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with GameStop Corp and WPP -

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

The idea behind GameStop Corp and WPP Dusseldorf 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.

Check out your portfolio center.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.