Correlation Between Chinese Gamer and International Games
Can any of the company-specific risk be diversified away by investing in both Chinese Gamer and International Games 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 Chinese Gamer and International Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chinese Gamer International and International Games System, you can compare the effects of market volatilities on Chinese Gamer and International Games 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 Chinese Gamer with a short position of International Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Gamer and International Games.
Diversification Opportunities for Chinese Gamer and International Games
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chinese and International is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Gamer International and International Games System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Games and Chinese Gamer 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 Chinese Gamer International are associated (or correlated) with International Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Games has no effect on the direction of Chinese Gamer i.e., Chinese Gamer and International Games go up and down completely randomly.
Pair Corralation between Chinese Gamer and International Games
Assuming the 90 days trading horizon Chinese Gamer International is expected to under-perform the International Games. But the stock apears to be less risky and, when comparing its historical volatility, Chinese Gamer International is 2.36 times less risky than International Games. The stock trades about -0.06 of its potential returns per unit of risk. The International Games System is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 98,600 in International Games System on August 30, 2024 and sell it today you would lose (3,600) from holding International Games System or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Gamer International vs. International Games System
Performance |
| Timeline |
| Chinese Gamer Intern |
| International Games |
Chinese Gamer and International Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Gamer and International Games
The main advantage of trading using opposite Chinese Gamer and International Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Gamer position performs unexpectedly, International Games 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 Games will offset losses from the drop in International Games' long position.| Chinese Gamer vs. YuantaP shares Taiwan Top | Chinese Gamer vs. YuantaP shares Taiwan Mid Cap | Chinese Gamer vs. YuantaP shares Taiwan Electronics | Chinese Gamer vs. Fubon MSCI Taiwan |
| International Games vs. Sinopac Financial Holdings | International Games vs. Fubon Financial Holding | International Games vs. Chi Hua Fitness | International Games vs. Phytohealth Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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