Correlation Between GAMESTOP and ELEMENT NUTRSCIENCES

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

By analyzing existing cross correlation between GAMESTOP and ELEMENT NUTRSCIENCES, you can compare the effects of market volatilities on GAMESTOP and ELEMENT NUTRSCIENCES 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 ELEMENT NUTRSCIENCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and ELEMENT NUTRSCIENCES.

Diversification Opportunities for GAMESTOP and ELEMENT NUTRSCIENCES

-0.32

Correlation Coefficient

GAMESTOP  ELEMENT NUTRSCIENCES

Very good diversification

The 3 months correlation between GAMESTOP and ELEMENT is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and ELEMENT NUTRSCIENCES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELEMENT NUTRSCIENCES 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 ELEMENT NUTRSCIENCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELEMENT NUTRSCIENCES has no effect on the direction of GAMESTOP i.e., GAMESTOP and ELEMENT NUTRSCIENCES go up and down completely randomly.

Pair Corralation between GAMESTOP and ELEMENT NUTRSCIENCES

Assuming the 90 days trading horizon GAMESTOP is expected to under-perform the ELEMENT NUTRSCIENCES. But the stock apears to be less risky and, when comparing its historical volatility, GAMESTOP is 3.77 times less risky than ELEMENT NUTRSCIENCES. The stock trades about -0.12 of its potential returns per unit of risk. The ELEMENT NUTRSCIENCES is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2.90  in ELEMENT NUTRSCIENCES on December 23, 2024 and sell it today you would earn a total of  1.15  from holding ELEMENT NUTRSCIENCES or generate 39.66% return on investment over 90 days.

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

GAMESTOP  vs.  ELEMENT NUTRSCIENCES

GAMESTOP

Risk-Adjusted Performance

Very Weak

Over the last 90 days GAMESTOP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

ELEMENT NUTRSCIENCES

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ELEMENT NUTRSCIENCES are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ELEMENT NUTRSCIENCES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GAMESTOP and ELEMENT NUTRSCIENCES

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

The idea behind GAMESTOP and ELEMENT NUTRSCIENCES 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.