Correlation Between International Games and Lihtai Construction
Can any of the company-specific risk be diversified away by investing in both International Games and Lihtai 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 Lihtai 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 Lihtai Construction Enterprise, you can compare the effects of market volatilities on International Games and Lihtai 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 Lihtai Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Games and Lihtai Construction.
Diversification Opportunities for International Games and Lihtai Construction
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and Lihtai is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding International Games System and Lihtai Construction Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lihtai 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 Lihtai Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lihtai Construction has no effect on the direction of International Games i.e., International Games and Lihtai Construction go up and down completely randomly.
Pair Corralation between International Games and Lihtai Construction
Assuming the 90 days trading horizon International Games System is expected to under-perform the Lihtai Construction. In addition to that, International Games is 5.03 times more volatile than Lihtai Construction Enterprise. It trades about -0.05 of its total potential returns per unit of risk. Lihtai Construction Enterprise is currently generating about -0.02 per unit of volatility. If you would invest 8,160 in Lihtai Construction Enterprise on October 23, 2024 and sell it today you would lose (30.00) from holding Lihtai Construction Enterprise or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Games System vs. Lihtai Construction Enterprise
Performance |
| Timeline |
| International Games |
| Lihtai Construction |
International Games and Lihtai Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Games and Lihtai Construction
The main advantage of trading using opposite International Games and Lihtai Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Games position performs unexpectedly, Lihtai 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 Lihtai Construction will offset losses from the drop in Lihtai Construction's long position.| International Games vs. RDC Semiconductor Co | International Games vs. WIN Semiconductors | International Games vs. Mospec Semiconductor Corp | International Games vs. Orient Semiconductor Electronics |
| Lihtai Construction vs. Ibase Gaming | Lihtai Construction vs. DingZing Advanced Materials | Lihtai Construction vs. International Games System | Lihtai Construction vs. Golden Biotechnology |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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