Correlation Between International Game and Daido Steel
Can any of the company-specific risk be diversified away by investing in both International Game and Daido Steel 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 Daido Steel 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 Daido Steel Co, you can compare the effects of market volatilities on International Game and Daido Steel 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 Daido Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Daido Steel.
Diversification Opportunities for International Game and Daido Steel
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between International and Daido is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Daido Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daido Steel 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 Daido Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daido Steel has no effect on the direction of International Game i.e., International Game and Daido Steel go up and down completely randomly.
Pair Corralation between International Game and Daido Steel
Assuming the 90 days horizon International Game Technology is expected to generate 1.14 times more return on investment than Daido Steel. However, International Game is 1.14 times more volatile than Daido Steel Co. It trades about -0.01 of its potential returns per unit of risk. Daido Steel Co is currently generating about -0.16 per unit of risk. If you would invest 1,899 in International Game Technology on September 12, 2024 and sell it today you would lose (49.00) from holding International Game Technology or give up 2.58% 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. Daido Steel Co
Performance |
| Timeline |
| International Game |
| Daido Steel |
International Game and Daido Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Daido Steel
The main advantage of trading using opposite International Game and Daido Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, Daido Steel 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 Daido Steel will offset losses from the drop in Daido Steel's long position.| International Game vs. Scientific Games | International Game vs. Superior Plus Corp | International Game vs. SIVERS SEMICONDUCTORS AB | International Game vs. NorAm Drilling AS |
| Daido Steel vs. ArcelorMittal | Daido Steel vs. NIPPON STEEL SPADR | Daido Steel vs. Reliance Steel Aluminum | Daido Steel vs. Superior Plus 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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