Correlation Between LEONARDO DRS and International Game
Can any of the company-specific risk be diversified away by investing in both LEONARDO DRS and International Game 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 LEONARDO DRS and International Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEONARDO DRS INC and International Game Technology, you can compare the effects of market volatilities on LEONARDO DRS and International Game 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 LEONARDO DRS with a short position of International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEONARDO DRS and International Game.
Diversification Opportunities for LEONARDO DRS and International Game
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LEONARDO and International is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding LEONARDO DRS INC and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and LEONARDO DRS 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 LEONARDO DRS INC are associated (or correlated) with International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of LEONARDO DRS i.e., LEONARDO DRS and International Game go up and down completely randomly.
Pair Corralation between LEONARDO DRS and International Game
Assuming the 90 days horizon LEONARDO DRS INC is expected to generate 1.45 times more return on investment than International Game. However, LEONARDO DRS is 1.45 times more volatile than International Game Technology. It trades about 0.11 of its potential returns per unit of risk. International Game Technology is currently generating about 0.0 per unit of risk. If you would invest 2,163 in LEONARDO DRS INC on September 3, 2024 and sell it today you would earn a total of 1,062 from holding LEONARDO DRS INC or generate 49.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LEONARDO DRS INC vs. International Game Technology
Performance |
| Timeline |
| LEONARDO DRS INC |
| International Game |
LEONARDO DRS and International Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEONARDO DRS and International Game
The main advantage of trading using opposite LEONARDO DRS and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEONARDO DRS position performs unexpectedly, International Game 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 International Game will offset losses from the drop in International Game's long position.| LEONARDO DRS vs. ELMOS SEMICONDUCTOR | LEONARDO DRS vs. MYFAIR GOLD P | LEONARDO DRS vs. Corsair Gaming | LEONARDO DRS vs. Fair Isaac Corp |
| International Game vs. Aluminum of | International Game vs. HOCHSCHILD MINING | International Game vs. GigaMedia | International Game vs. QINGCI GAMES 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 the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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