Correlation Between International Games and Cayenne Entertainment
Can any of the company-specific risk be diversified away by investing in both International Games and Cayenne Entertainment 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 Cayenne Entertainment 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 Cayenne Entertainment Technology, you can compare the effects of market volatilities on International Games and Cayenne Entertainment 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 Cayenne Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Games and Cayenne Entertainment.
Diversification Opportunities for International Games and Cayenne Entertainment
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between International and Cayenne is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding International Games System and Cayenne Entertainment Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cayenne Entertainment 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 Cayenne Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cayenne Entertainment has no effect on the direction of International Games i.e., International Games and Cayenne Entertainment go up and down completely randomly.
Pair Corralation between International Games and Cayenne Entertainment
Assuming the 90 days trading horizon International Games System is expected to under-perform the Cayenne Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, International Games System is 2.02 times less risky than Cayenne Entertainment. The stock trades about -0.27 of its potential returns per unit of risk. The Cayenne Entertainment Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,715 in Cayenne Entertainment Technology on August 24, 2024 and sell it today you would earn a total of 80.00 from holding Cayenne Entertainment Technology or generate 2.15% 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. Cayenne Entertainment Technolo
Performance |
| Timeline |
| International Games |
| Cayenne Entertainment |
International Games and Cayenne Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Games and Cayenne Entertainment
The main advantage of trading using opposite International Games and Cayenne Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Games position performs unexpectedly, Cayenne Entertainment 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 Cayenne Entertainment will offset losses from the drop in Cayenne Entertainment's long position.| International Games vs. HOYA Resort Hotel | International Games vs. Chunghwa Telecom Co | International Games vs. FDC International Hotels | International Games vs. Formosa Electronic Industries |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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