Correlation Between Tandem Diabetes and Games Workshop

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

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

Diversification Opportunities for Tandem Diabetes and Games Workshop

-0.3

Correlation Coefficient

Tandem Diabetes  Games Workshop

Very good diversification

The 3 months correlation between Tandem and Games is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Tandem Diabetes Care 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 Tandem Diabetes 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 Tandem Diabetes Care 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 Tandem Diabetes i.e., Tandem Diabetes and Games Workshop go up and down completely randomly.

Pair Corralation between Tandem Diabetes and Games Workshop

Given the investment horizon of 90 days Tandem Diabetes Care is expected to under-perform the Games Workshop. In addition to that, Tandem Diabetes is 2.03 times more volatile than Games Workshop Group. It trades about -0.13 of its total potential returns per unit of risk. Games Workshop Group is currently generating about 0.03 per unit of volatility. If you would invest  17,800  in Games Workshop Group on December 19, 2024 and sell it today you would earn a total of  500.00  from holding Games Workshop Group or generate 2.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.44%
Values	Daily Returns

Tandem Diabetes Care  vs.  Games Workshop Group

Tandem Diabetes Care

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tandem Diabetes Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Games Workshop Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking signals, Games Workshop is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tandem Diabetes and Games Workshop

The main advantage of trading using opposite Tandem Diabetes and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tandem Diabetes 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 Tandem Diabetes Care 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.