Correlation Between Games Workshop and Microsoft
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Microsoft 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 Games Workshop and Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Games Workshop Group and Microsoft, you can compare the effects of market volatilities on Games Workshop and Microsoft 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 Games Workshop with a short position of Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Microsoft.
Diversification Opportunities for Games Workshop and Microsoft
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Games and Microsoft is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and Games Workshop 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 Games Workshop Group are associated (or correlated) with Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of Games Workshop i.e., Games Workshop and Microsoft go up and down completely randomly.
Pair Corralation between Games Workshop and Microsoft
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 2.13 times more return on investment than Microsoft. However, Games Workshop is 2.13 times more volatile than Microsoft. It trades about 0.18 of its potential returns per unit of risk. Microsoft is currently generating about -0.04 per unit of risk. If you would invest 17,407 in Games Workshop Group on September 9, 2025 and sell it today you would earn a total of 5,153 from holding Games Workshop Group or generate 29.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Games Workshop Group vs. Microsoft
Performance |
| Timeline |
| Games Workshop Group |
| Microsoft |
Games Workshop and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Microsoft
The main advantage of trading using opposite Games Workshop and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.| Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc |
| Microsoft vs. ARDAGH METAL PACDL 0001 | Microsoft vs. Genertec Universal Medical | Microsoft vs. IMAGIN MEDICAL INC | Microsoft vs. Avanos Medical |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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