Correlation Between Gaming and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Gaming and Dow Jones 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 Gaming and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming and Leisure and Dow Jones Industrial, you can compare the effects of market volatilities on Gaming and Dow Jones 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 Gaming with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming and Dow Jones.
Diversification Opportunities for Gaming and Dow Jones
Poor diversification
The 3 months correlation between Gaming and Dow is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gaming and Leisure and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Gaming 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 Gaming and Leisure are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Gaming i.e., Gaming and Dow Jones go up and down completely randomly.
Pair Corralation between Gaming and Dow Jones
Assuming the 90 days horizon Gaming and Leisure is expected to generate 1.47 times more return on investment than Dow Jones. However, Gaming is 1.47 times more volatile than Dow Jones Industrial. It trades about 0.14 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 3,982 in Gaming and Leisure on September 1, 2024 and sell it today you would earn a total of 897.00 from holding Gaming and Leisure or generate 22.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.18% |
| Values | Daily Returns |
Gaming and Leisure vs. Dow Jones Industrial
Performance |
| Timeline |
Gaming and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Gaming and Leisure
Pair trading matchups for Gaming
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Gaming and Dow Jones
The main advantage of trading using opposite Gaming and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Gaming vs. YATRA ONLINE DL 0001 | Gaming vs. Lamar Advertising | Gaming vs. Columbia Sportswear | Gaming vs. Transportadora de Gas |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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