Correlation Between GAMESTOP and First Quantum
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and First Quantum 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 First Quantum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and First Quantum Minerals, you can compare the effects of market volatilities on GAMESTOP and First Quantum 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 First Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and First Quantum.
Diversification Opportunities for GAMESTOP and First Quantum
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GAMESTOP and First is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and First Quantum Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Quantum Minerals 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 First Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Quantum Minerals has no effect on the direction of GAMESTOP i.e., GAMESTOP and First Quantum go up and down completely randomly.
Pair Corralation between GAMESTOP and First Quantum
Assuming the 90 days trading horizon GAMESTOP is expected to generate 1.26 times more return on investment than First Quantum. However, GAMESTOP is 1.26 times more volatile than First Quantum Minerals. It trades about 0.16 of its potential returns per unit of risk. First Quantum Minerals is currently generating about 0.05 per unit of risk. If you would invest 1,902 in GAMESTOP on October 23, 2024 and sell it today you would earn a total of 734.00 from holding GAMESTOP or generate 38.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.33% |
Values | Daily Returns |
GAMESTOP vs. First Quantum Minerals
Performance |
Timeline |
GAMESTOP |
First Quantum Minerals |
GAMESTOP and First Quantum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GAMESTOP and First Quantum
The main advantage of trading using opposite GAMESTOP and First Quantum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, First Quantum 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 First Quantum will offset losses from the drop in First Quantum's long position.GAMESTOP vs. Canadian Utilities Limited | GAMESTOP vs. Inspire Medical Systems | GAMESTOP vs. BJs Restaurants | GAMESTOP vs. Luckin Coffee |
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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 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.
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