Correlation Between International Games and Highwealth Construction
Can any of the company-specific risk be diversified away by investing in both International Games and Highwealth Construction 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 International Games and Highwealth Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Games System and Highwealth Construction Corp, you can compare the effects of market volatilities on International Games and Highwealth Construction 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 International Games with a short position of Highwealth Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Games and Highwealth Construction.
Diversification Opportunities for International Games and Highwealth Construction
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between International and Highwealth is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding International Games System and Highwealth Construction Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highwealth Construction and International Games 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 International Games System are associated (or correlated) with Highwealth Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highwealth Construction has no effect on the direction of International Games i.e., International Games and Highwealth Construction go up and down completely randomly.
Pair Corralation between International Games and Highwealth Construction
Assuming the 90 days trading horizon International Games System is expected to generate 35.8 times more return on investment than Highwealth Construction. However, International Games is 35.8 times more volatile than Highwealth Construction Corp. It trades about 0.06 of its potential returns per unit of risk. Highwealth Construction Corp is currently generating about 0.01 per unit of risk. If you would invest 17,537 in International Games System on August 30, 2024 and sell it today you would earn a total of 77,463 from holding International Games System or generate 441.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Games System vs. Highwealth Construction Corp
Performance |
| Timeline |
| International Games |
| Highwealth Construction |
International Games and Highwealth Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Games and Highwealth Construction
The main advantage of trading using opposite International Games and Highwealth Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Games position performs unexpectedly, Highwealth Construction 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 Highwealth Construction will offset losses from the drop in Highwealth Construction's long position.| International Games vs. Sinopac Financial Holdings | International Games vs. Fubon Financial Holding | International Games vs. Chi Hua Fitness | International Games vs. Phytohealth Corp |
| Highwealth Construction vs. Tainan Spinning Co | Highwealth Construction vs. Carnival Industrial Corp | Highwealth Construction vs. Symtek Automation Asia | Highwealth Construction vs. CTCI 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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