Correlation Between International Game and Churchill Downs
Can any of the company-specific risk be diversified away by investing in both International Game and Churchill Downs 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 Churchill Downs 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 Churchill Downs Incorporated, you can compare the effects of market volatilities on International Game and Churchill Downs 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 Churchill Downs. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Churchill Downs.
Diversification Opportunities for International Game and Churchill Downs
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and Churchill is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Churchill Downs Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Downs 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 Churchill Downs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Churchill Downs has no effect on the direction of International Game i.e., International Game and Churchill Downs go up and down completely randomly.
Pair Corralation between International Game and Churchill Downs
Assuming the 90 days horizon International Game Technology is expected to under-perform the Churchill Downs. In addition to that, International Game is 1.22 times more volatile than Churchill Downs Incorporated. It trades about -0.01 of its total potential returns per unit of risk. Churchill Downs Incorporated is currently generating about 0.03 per unit of volatility. If you would invest 10,462 in Churchill Downs Incorporated on September 3, 2024 and sell it today you would earn a total of 2,738 from holding Churchill Downs Incorporated or generate 26.17% 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. Churchill Downs Incorporated
Performance |
| Timeline |
| International Game |
| Churchill Downs |
International Game and Churchill Downs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Churchill Downs
The main advantage of trading using opposite International Game and Churchill Downs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, Churchill Downs 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 Churchill Downs will offset losses from the drop in Churchill Downs' long position.| International Game vs. Aluminum of | International Game vs. HOCHSCHILD MINING | International Game vs. GigaMedia | International Game vs. QINGCI GAMES INC |
| Churchill Downs vs. Lion One Metals | Churchill Downs vs. Eastman Chemical | Churchill Downs vs. FIREWEED METALS P | Churchill Downs vs. China BlueChemical |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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