This year, GME stock (NYSE:GME) has been one of the few stocks to outperform the S&P 500. The majority of GME stock (NYSE:GME) rallies have been caused by business-related news.
In 2021, GME stock (NYSE:GME) moved inversely to the market, a phenomenon known as negative beta. However, during times when investors are more cautious, GME stock (NYSE:GME) has tended to follow more significant market movements.
Let’s examine what to anticipate from GameStop’s stock in October by examining its historical average performance.
What Usually Happens to GME stock in October?
Historical average returns show that GME stock (NYSE:GME) tends to plateau around October. Look at the graph below:
The Christmas season, which greatly impacts shops in general, is most likely one of the reasons for this lackluster performance.
Trends suggest that retail stock market prices often rise in August and September. This is primarily related to the impending Christmas shopping season.
Following third-quarter results reports, traders prefer to “sell the news.”
Another idea holds that equities generally decrease during the pre-holiday season because traders dump their holdings to reduce risk when the markets are closed.
When we compare GameStop’s performance in October to that of the S&P 500, we observe very little difference:
During this time, however, the stock market experiences the so-called “October impact.” This is a time in which equities tend to fall, generally as a result of a psychological influence.
Is GME Stock a Haven From Market Downturns?
GME stock (NYSE:GME) has moved at a negative beta in the last two years or against the larger market. As a result, GME stock (NYSE:GME) might be used as a hedge in the case of a market crisis.
However, GameStop’s beta has increased this year from 0.98 to 2.08, showing a good link with market developments.
As a result, GameStop’s current beta suggests that investors are concerned about macroeconomic factors such as increasing interest rates, excessive inflation, and the chance of a recession.
Could GME Stock Price Rise Further?
Due to the quirks of GameStop’s inventory, the answer is unequivocal yes. GME is mainly held by regular investors and is well-known in the media and on social media channels.
Furthermore, developments such as Chairman Ryan Cohen’s acquisition of additional shares, the stock split in dividend form, and the introduction of the GameStop NFT marketplace helped GameStop shareholder morale.
When Bed Bath & Beyond – Get Bed Bath & Beyond Inc. Report plummeted after Cohen sold off his shares, other meme stocks, like GME, plunged with it.
There are no notable stock catalysts forecast for GME stock (NYSE:GME) soon. However, around 18% of the company is now Shorted, and borrowing costs are almost 10%. This suggests a significant desire among short sellers to maintain their holdings in GME.
The good news is that GameStop’s volatility has decreased over the last two quarters.
Featured Image- Megapixl @ Jetcityimage
Author Okoro Chinedu 
