Correlation Between International Game and LEONARDO DRS
Can any of the company-specific risk be diversified away by investing in both International Game and LEONARDO DRS 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 Game and LEONARDO DRS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Game Technology and LEONARDO DRS INC, you can compare the effects of market volatilities on International Game and LEONARDO DRS 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 Game with a short position of LEONARDO DRS. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and LEONARDO DRS.
Diversification Opportunities for International Game and LEONARDO DRS
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and LEONARDO is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and LEONARDO DRS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEONARDO DRS INC and International Game 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 Game Technology are associated (or correlated) with LEONARDO DRS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEONARDO DRS INC has no effect on the direction of International Game i.e., International Game and LEONARDO DRS go up and down completely randomly.
Pair Corralation between International Game and LEONARDO DRS
Assuming the 90 days horizon International Game is expected to generate 100.39 times less return on investment than LEONARDO DRS. But when comparing it to its historical volatility, International Game Technology is 1.45 times less risky than LEONARDO DRS. It trades about 0.0 of its potential returns per unit of risk. LEONARDO DRS INC is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,163 in LEONARDO DRS INC on September 3, 2024 and sell it today you would earn a total of 1,062 from holding LEONARDO DRS INC or generate 49.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Game Technology vs. LEONARDO DRS INC
Performance |
| Timeline |
| International Game |
| LEONARDO DRS INC |
International Game and LEONARDO DRS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and LEONARDO DRS
The main advantage of trading using opposite International Game and LEONARDO DRS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, LEONARDO DRS 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 LEONARDO DRS will offset losses from the drop in LEONARDO DRS's long position.| International Game vs. Aluminum of | International Game vs. HOCHSCHILD MINING | International Game vs. GigaMedia | International Game vs. QINGCI GAMES INC |
| LEONARDO DRS vs. ELMOS SEMICONDUCTOR | LEONARDO DRS vs. MYFAIR GOLD P | LEONARDO DRS vs. Corsair Gaming | LEONARDO DRS vs. Fair Isaac Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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