Correlation Between International Games and Yuan High
Can any of the company-specific risk be diversified away by investing in both International Games and Yuan High 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 Yuan High 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 Yuan High Tech Development, you can compare the effects of market volatilities on International Games and Yuan High 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 Yuan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Games and Yuan High.
Diversification Opportunities for International Games and Yuan High
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and Yuan is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding International Games System and Yuan High Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuan High Tech 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 Yuan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuan High Tech has no effect on the direction of International Games i.e., International Games and Yuan High go up and down completely randomly.
Pair Corralation between International Games and Yuan High
Assuming the 90 days trading horizon International Games System is expected to generate 1.07 times more return on investment than Yuan High. However, International Games is 1.07 times more volatile than Yuan High Tech Development. It trades about -0.08 of its potential returns per unit of risk. Yuan High Tech Development is currently generating about -0.2 per unit of risk. If you would invest 104,000 in International Games System on August 26, 2024 and sell it today you would lose (4,600) from holding International Games System or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Games System vs. Yuan High Tech Development
Performance |
| Timeline |
| International Games |
| Yuan High Tech |
International Games and Yuan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Games and Yuan High
The main advantage of trading using opposite International Games and Yuan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Games position performs unexpectedly, Yuan High 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 Yuan High will offset losses from the drop in Yuan High's long position.The idea behind International Games System and Yuan High Tech Development pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Yuan High vs. Novatek Microelectronics Corp | Yuan High vs. Quanta Computer | Yuan High vs. United Microelectronics |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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