Correlation Between International Game and CeoTronics
Can any of the company-specific risk be diversified away by investing in both International Game and CeoTronics 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 CeoTronics 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 CeoTronics AG, you can compare the effects of market volatilities on International Game and CeoTronics 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 CeoTronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and CeoTronics.
Diversification Opportunities for International Game and CeoTronics
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and CeoTronics is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics AG 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 CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of International Game i.e., International Game and CeoTronics go up and down completely randomly.
Pair Corralation between International Game and CeoTronics
Assuming the 90 days horizon International Game Technology is expected to under-perform the CeoTronics. In addition to that, International Game is 1.28 times more volatile than CeoTronics AG. It trades about -0.14 of its total potential returns per unit of risk. CeoTronics AG is currently generating about 0.04 per unit of volatility. If you would invest 620.00 in CeoTronics AG on October 16, 2024 and sell it today you would earn a total of 5.00 from holding CeoTronics AG or generate 0.81% 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. CeoTronics AG
Performance |
| Timeline |
| International Game |
| CeoTronics AG |
International Game and CeoTronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and CeoTronics
The main advantage of trading using opposite International Game and CeoTronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, CeoTronics 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 CeoTronics will offset losses from the drop in CeoTronics' long position.| International Game vs. Benchmark Electronics | International Game vs. Highlight Communications AG | International Game vs. Zoom Video Communications | International Game vs. Meiko Electronics Co |
| CeoTronics vs. Datadog | CeoTronics vs. Alliance Data Systems | CeoTronics vs. International Game Technology | CeoTronics vs. MICRONIC MYDATA |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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