Correlation Between NanoTech Gaming and GameStop Corp

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

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

Diversification Opportunities for NanoTech Gaming and GameStop Corp

0.0

Correlation Coefficient

NanoTech Gaming  GameStop Corp

Pay attention - limited upside

The 3 months correlation between NanoTech and GameStop is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NanoTech Gaming and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp and NanoTech Gaming 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 NanoTech Gaming 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 NanoTech Gaming i.e., NanoTech Gaming and GameStop Corp go up and down completely randomly.

Pair Corralation between NanoTech Gaming and GameStop Corp

If you would invest  1,199  in GameStop Corp on February 28, 2024 and sell it today you would earn a total of  701.00  from holding GameStop Corp or generate 58.47% return on investment over 90 days.

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

NanoTech Gaming  vs.  GameStop Corp

NanoTech Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NanoTech Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, NanoTech Gaming is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

GameStop Corp

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain primary indicators, GameStop Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NanoTech Gaming and GameStop Corp

The main advantage of trading using opposite NanoTech Gaming and GameStop Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NanoTech Gaming 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 NanoTech Gaming 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.