Correlation Between GameStop Corp and 1StdibsCom

Can any of the company-specific risk be diversified away by investing in both GameStop Corp and 1StdibsCom 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 1StdibsCom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GameStop Corp and 1StdibsCom, you can compare the effects of market volatilities on GameStop Corp and 1StdibsCom 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 1StdibsCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and 1StdibsCom.

Diversification Opportunities for GameStop Corp and 1StdibsCom

-0.56

Correlation Coefficient

GameStop Corp  1StdibsCom

Excellent diversification

The 3 months correlation between GameStop and 1StdibsCom is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and 1StdibsCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1StdibsCom 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 1StdibsCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1StdibsCom has no effect on the direction of GameStop Corp i.e., GameStop Corp and 1StdibsCom go up and down completely randomly.

Pair Corralation between GameStop Corp and 1StdibsCom

Considering the 90-day investment horizon GameStop Corp is expected to generate 0.81 times more return on investment than 1StdibsCom. However, GameStop Corp is 1.24 times less risky than 1StdibsCom. It trades about -0.04 of its potential returns per unit of risk. 1StdibsCom is currently generating about -0.08 per unit of risk. If you would invest  2,388  in GameStop Corp on April 27, 2025 and sell it today you would lose (55.00) from holding GameStop Corp or give up 2.3% of portfolio value over 90 days.

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

GameStop Corp  vs.  1StdibsCom

GameStop Corp

Risk-Adjusted Performance

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 latest inconsistent performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

1StdibsCom

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 1StdibsCom are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental drivers, 1StdibsCom unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GameStop Corp and 1StdibsCom

The main advantage of trading using opposite GameStop Corp and 1StdibsCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp position performs unexpectedly, 1StdibsCom 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 1StdibsCom will offset losses from the drop in 1StdibsCom's long position.

The idea behind GameStop Corp and 1StdibsCom 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.