Correlation Between GameStop Corp and ODP

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

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

Diversification Opportunities for GameStop Corp and ODP

0.33

Correlation Coefficient

GameStop Corp  ODP

Weak diversification

The 3 months correlation between GameStop and ODP is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and The ODP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODP 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 ODP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODP has no effect on the direction of GameStop Corp i.e., GameStop Corp and ODP go up and down completely randomly.

Pair Corralation between GameStop Corp and ODP

Assuming the 90 days trading horizon GameStop Corp is expected to generate 0.52 times more return on investment than ODP. However, GameStop Corp is 1.94 times less risky than ODP. It trades about -0.05 of its potential returns per unit of risk. The ODP is currently generating about -0.11 per unit of risk. If you would invest  53,600  in GameStop Corp on April 25, 2025 and sell it today you would lose (9,119) from holding GameStop Corp or give up 17.01% of portfolio value over 90 days.

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

GameStop Corp  vs.  The ODP

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

ODP

Risk-Adjusted Performance

Very Weak

Over the last 90 days The ODP 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 basic indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with GameStop Corp and ODP

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

The idea behind GameStop Corp and The ODP 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.