Correlation Between GameStop Corp and Advanced Info

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

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

Diversification Opportunities for GameStop Corp and Advanced Info

0.0

Correlation Coefficient

GameStop Corp  Advanced Info

Pay attention - limited upside

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

Pair Corralation between GameStop Corp and Advanced Info

If you would invest  1,751  in GameStop Corp on October 10, 2024 and sell it today you would earn a total of  1,286  from holding GameStop Corp or generate 73.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GameStop Corp  vs.  Advanced Info Service

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 uncertain basic indicators, GameStop Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Advanced Info Service

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GameStop Corp and Advanced Info

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

The idea behind GameStop Corp and Advanced Info Service 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 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.