Correlation Between GAMESTOP and AGR GROUP

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

By analyzing existing cross correlation between GAMESTOP and AGR GROUP A , you can compare the effects of market volatilities on GAMESTOP and AGR GROUP 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 with a short position of AGR GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and AGR GROUP.

Diversification Opportunities for GAMESTOP and AGR GROUP

0.63

Correlation Coefficient

GAMESTOP  AGR GROUP

Poor diversification

The 3 months correlation between GAMESTOP and AGR is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and AGR GROUP A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGR GROUP A and GAMESTOP 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 are associated (or correlated) with AGR GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGR GROUP A has no effect on the direction of GAMESTOP i.e., GAMESTOP and AGR GROUP go up and down completely randomly.

Pair Corralation between GAMESTOP and AGR GROUP

Assuming the 90 days trading horizon GAMESTOP is expected to generate 2.08 times more return on investment than AGR GROUP. However, GAMESTOP is 2.08 times more volatile than AGR GROUP A . It trades about 0.22 of its potential returns per unit of risk. AGR GROUP A is currently generating about -0.12 per unit of risk. If you would invest  2,660  in GAMESTOP on October 8, 2024 and sell it today you would earn a total of  375.00  from holding GAMESTOP or generate 14.1% return on investment over 90 days.

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

GAMESTOP  vs.  AGR GROUP A

GAMESTOP

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GAMESTOP are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GAMESTOP unveiled solid returns over the last few months and may actually be approaching a breakup point.

AGR GROUP A

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AGR GROUP A are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, AGR GROUP is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GAMESTOP and AGR GROUP

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

The idea behind GAMESTOP and AGR GROUP A 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.