Correlation Between International Games and Userjoy Technology
Can any of the company-specific risk be diversified away by investing in both International Games and Userjoy Technology 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 Userjoy Technology 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 Userjoy Technology Co, you can compare the effects of market volatilities on International Games and Userjoy Technology 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 Userjoy Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Games and Userjoy Technology.
Diversification Opportunities for International Games and Userjoy Technology
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and Userjoy is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding International Games System and Userjoy Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Userjoy Technology 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 Userjoy Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Userjoy Technology has no effect on the direction of International Games i.e., International Games and Userjoy Technology go up and down completely randomly.
Pair Corralation between International Games and Userjoy Technology
Assuming the 90 days trading horizon International Games System is expected to under-perform the Userjoy Technology. In addition to that, International Games is 2.49 times more volatile than Userjoy Technology Co. It trades about -0.07 of its total potential returns per unit of risk. Userjoy Technology Co is currently generating about -0.08 per unit of volatility. If you would invest 7,860 in Userjoy Technology Co on October 25, 2024 and sell it today you would lose (340.00) from holding Userjoy Technology Co or give up 4.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Games System vs. Userjoy Technology Co
Performance |
| Timeline |
| International Games |
| Userjoy Technology |
International Games and Userjoy Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Games and Userjoy Technology
The main advantage of trading using opposite International Games and Userjoy Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Games position performs unexpectedly, Userjoy Technology 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 Userjoy Technology will offset losses from the drop in Userjoy Technology's long position.| International Games vs. Powerchip Semiconductor Manufacturing | International Games vs. WiseChip Semiconductor | International Games vs. Thye Ming Industrial | International Games vs. Holtek Semiconductor |
| Userjoy Technology vs. Gamania Digital Entertainment | Userjoy Technology vs. Soft World International | Userjoy Technology vs. Chinese Gamer International | Userjoy Technology vs. International Games System |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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