Correlation Between GameStop Corp and Upbound

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

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

Diversification Opportunities for GameStop Corp and Upbound

0.37

Correlation Coefficient

GameStop Corp  Upbound

Weak diversification

The 3 months correlation between GameStop and Upbound is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and Upbound Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upbound Group and GameStop Corp 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 Corp are associated (or correlated) with Upbound. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upbound Group has no effect on the direction of GameStop Corp i.e., GameStop Corp and Upbound go up and down completely randomly.

Pair Corralation between GameStop Corp and Upbound

Considering the 90-day investment horizon GameStop Corp is expected to under-perform the Upbound. In addition to that, GameStop Corp is 1.63 times more volatile than Upbound Group. It trades about -0.02 of its total potential returns per unit of risk. Upbound Group is currently generating about 0.03 per unit of volatility. If you would invest  2,291  in Upbound Group on January 20, 2024 and sell it today you would earn a total of  755.00  from holding Upbound Group or generate 32.96% return on investment over 90 days.

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

GameStop Corp  vs.  Upbound Group

GameStop Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GameStop Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Upbound Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Upbound Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with GameStop Corp and Upbound

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

The idea behind GameStop Corp and Upbound 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.