Correlation Between INTNED and GameStop Corp

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

By analyzing existing cross correlation between INTNED 575 and GameStop Corp, you can compare the effects of market volatilities on INTNED and GameStop Corp 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 INTNED with a short position of GameStop Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTNED and GameStop Corp.

Diversification Opportunities for INTNED and GameStop Corp

-0.49

Correlation Coefficient

INTNED  GameStop Corp

Very good diversification

The 3 months correlation between INTNED and GameStop is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding INTNED 575 and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp and INTNED 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 INTNED 575 are associated (or correlated) with GameStop Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameStop Corp has no effect on the direction of INTNED i.e., INTNED and GameStop Corp go up and down completely randomly.

Pair Corralation between INTNED and GameStop Corp

Assuming the 90 days trading horizon INTNED is expected to generate 17.1 times less return on investment than GameStop Corp. But when comparing it to its historical volatility, INTNED 575 is 4.99 times less risky than GameStop Corp. It trades about 0.01 of its potential returns per unit of risk. GameStop Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,140  in GameStop Corp on October 15, 2024 and sell it today you would earn a total of  1,091  from holding GameStop Corp or generate 50.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	49.7%
Values	Daily Returns

INTNED 575  vs.  GameStop Corp

INTNED 575

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTNED 575 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for INTNED 575 investors.

GameStop Corp

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent primary indicators, GameStop Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INTNED and GameStop Corp

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

The idea behind INTNED 575 and GameStop Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.