Correlation Between International Game and Best Buy
Can any of the company-specific risk be diversified away by investing in both International Game and Best Buy 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 Best Buy 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 Best Buy Co, you can compare the effects of market volatilities on International Game and Best Buy 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 Best Buy. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Best Buy.
Diversification Opportunities for International Game and Best Buy
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between International and Best is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Best Buy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Best Buy 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 Best Buy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Best Buy has no effect on the direction of International Game i.e., International Game and Best Buy go up and down completely randomly.
Pair Corralation between International Game and Best Buy
Assuming the 90 days horizon International Game Technology is expected to under-perform the Best Buy. In addition to that, International Game is 1.36 times more volatile than Best Buy Co. It trades about -0.17 of its total potential returns per unit of risk. Best Buy Co is currently generating about -0.01 per unit of volatility. If you would invest 8,179 in Best Buy Co on October 13, 2024 and sell it today you would lose (46.00) from holding Best Buy Co or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Game Technology vs. Best Buy Co
Performance |
| Timeline |
| International Game |
| Best Buy |
International Game and Best Buy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Best Buy
The main advantage of trading using opposite International Game and Best Buy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, Best Buy 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 Best Buy will offset losses from the drop in Best Buy's long position.| International Game vs. LANDSEA GREEN MANAGEMENT | International Game vs. CEOTRONICS | International Game vs. MAVEN WIRELESS SWEDEN | International Game vs. CeoTronics AG |
| Best Buy vs. International Game Technology | Best Buy vs. GigaMedia | Best Buy vs. CNVISION MEDIA | Best Buy vs. ANTA SPORTS PRODUCT |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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