Correlation Between Gamestop Corp and Aarons Holdings

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Gamestop Corp and Aarons Holdings 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 Aarons Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamestop Corp and Aarons Holdings, you can compare the effects of market volatilities on Gamestop Corp and Aarons Holdings 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 Aarons Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamestop Corp and Aarons Holdings.

Diversification Opportunities for Gamestop Corp and Aarons Holdings

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between Gamestop and Aarons is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Gamestop Corp and Aarons Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarons Holdings 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 Aarons Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarons Holdings has no effect on the direction of Gamestop Corp i.e., Gamestop Corp and Aarons Holdings go up and down completely randomly.

Pair Corralation between Gamestop Corp and Aarons Holdings

Considering the 90-day investment horizon Gamestop Corp is expected to generate 1.71 times more return on investment than Aarons Holdings. However, Gamestop Corp is 1.71 times more volatile than Aarons Holdings. It trades about 0.07 of its potential returns per unit of risk. Aarons Holdings is currently generating about -0.17 per unit of risk. If you would invest  2,514  in Gamestop Corp on July 8, 2022 and sell it today you would earn a total of  125.00  from holding Gamestop Corp or generate 4.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Gamestop Corp  vs.  Aarons Holdings

 Performance (%) 
       Timeline  
Gamestop Corp 
Gamestop Performance
0 of 100
Over the last 90 days Gamestop Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in November 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Gamestop Price Channel

Aarons Holdings 
Aarons Performance
0 of 100
Over the last 90 days Aarons Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in November 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Aarons Price Channel

Gamestop Corp and Aarons Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gamestop Corp and Aarons Holdings

The main advantage of trading using opposite Gamestop Corp and Aarons Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamestop Corp position performs unexpectedly, Aarons Holdings 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 Aarons Holdings will offset losses from the drop in Aarons Holdings' long position.
Gamestop Corp vs. Best Buy Company
The idea behind Gamestop Corp and Aarons Holdings 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.
Aarons Holdings vs. Amazon Inc
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 Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

Other Complementary Tools

Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go