Correlation Between GameStop Corp and ITV -

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

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

Diversification Opportunities for GameStop Corp and ITV -

-0.4

Correlation Coefficient

GameStop Corp  ITV -

Very good diversification

The 3 months correlation between GameStop and ITV is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and ITV Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITV 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 ITV -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITV Dusseldorf has no effect on the direction of GameStop Corp i.e., GameStop Corp and ITV - go up and down completely randomly.

Pair Corralation between GameStop Corp and ITV -

Assuming the 90 days trading horizon GameStop Corp is expected to generate 1.47 times more return on investment than ITV -. However, GameStop Corp is 1.47 times more volatile than ITV Dusseldorf. It trades about 0.24 of its potential returns per unit of risk. ITV Dusseldorf is currently generating about 0.0 per unit of risk. If you would invest  1,873  in GameStop Corp on October 8, 2024 and sell it today you would earn a total of  1,164  from holding GameStop Corp or generate 62.15% return on investment over 90 days.

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

GameStop Corp  vs.  ITV Dusseldorf

GameStop Corp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 18 (%) 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.

ITV Dusseldorf

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ITV Dusseldorf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ITV - is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GameStop Corp and ITV -

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

The idea behind GameStop Corp and ITV 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.