Correlation Between International Games and Cowealth Medical
Can any of the company-specific risk be diversified away by investing in both International Games and Cowealth Medical 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 Cowealth Medical 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 Cowealth Medical Holding, you can compare the effects of market volatilities on International Games and Cowealth Medical 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 Cowealth Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Games and Cowealth Medical.
Diversification Opportunities for International Games and Cowealth Medical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between International and Cowealth is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding International Games System and Cowealth Medical Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cowealth Medical Holding 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 Cowealth Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cowealth Medical Holding has no effect on the direction of International Games i.e., International Games and Cowealth Medical go up and down completely randomly.
Pair Corralation between International Games and Cowealth Medical
Assuming the 90 days trading horizon International Games System is expected to generate 61.46 times more return on investment than Cowealth Medical. However, International Games is 61.46 times more volatile than Cowealth Medical Holding. It trades about 0.06 of its potential returns per unit of risk. Cowealth Medical Holding is currently generating about -0.03 per unit of risk. If you would invest 23,562 in International Games System on October 25, 2024 and sell it today you would earn a total of 71,038 from holding International Games System or generate 301.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Games System vs. Cowealth Medical Holding
Performance |
| Timeline |
| International Games |
| Cowealth Medical Holding |
International Games and Cowealth Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Games and Cowealth Medical
The main advantage of trading using opposite International Games and Cowealth Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Games position performs unexpectedly, Cowealth Medical 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 Cowealth Medical will offset losses from the drop in Cowealth Medical's long position.| International Games vs. BRIM Biotechnology | International Games vs. Apex Biotechnology Corp | International Games vs. Universal Vision Biotechnology | International Games vs. Phytohealth Corp |
| Cowealth Medical vs. Prime Oil Chemical | Cowealth Medical vs. Shiny Chemical Industrial | Cowealth Medical vs. AVer Information | Cowealth Medical vs. Eagle Cold Storage |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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