Correlation Between TIMES CHINA and Games Workshop

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

By analyzing existing cross correlation between TIMES CHINA HLDGS and Games Workshop Group, you can compare the effects of market volatilities on TIMES CHINA and Games Workshop 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 TIMES CHINA with a short position of Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of TIMES CHINA and Games Workshop.

Diversification Opportunities for TIMES CHINA and Games Workshop

0.01

Correlation Coefficient

TIMES CHINA  Games Workshop

Significant diversification

The 3 months correlation between TIMES and Games is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding TIMES CHINA HLDGS and Games Workshop Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Games Workshop Group and TIMES CHINA 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 TIMES CHINA HLDGS are associated (or correlated) with Games Workshop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Games Workshop Group has no effect on the direction of TIMES CHINA i.e., TIMES CHINA and Games Workshop go up and down completely randomly.

Pair Corralation between TIMES CHINA and Games Workshop

Assuming the 90 days horizon TIMES CHINA HLDGS is expected to generate 2.85 times more return on investment than Games Workshop. However, TIMES CHINA is 2.85 times more volatile than Games Workshop Group. It trades about -0.06 of its potential returns per unit of risk. Games Workshop Group is currently generating about -0.34 per unit of risk. If you would invest  3.85  in TIMES CHINA HLDGS on October 3, 2024 and sell it today you would lose (0.25) from holding TIMES CHINA HLDGS or give up 6.49% of portfolio value over 90 days.

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

TIMES CHINA HLDGS  vs.  Games Workshop Group

TIMES CHINA HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TIMES CHINA HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Games Workshop Group

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Games Workshop unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TIMES CHINA and Games Workshop

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

The idea behind TIMES CHINA HLDGS and Games Workshop Group 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.