Correlation Between International Game and Genuine Parts
Can any of the company-specific risk be diversified away by investing in both International Game and Genuine Parts 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 Genuine Parts 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 Genuine Parts, you can compare the effects of market volatilities on International Game and Genuine Parts 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 Genuine Parts. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Genuine Parts.
Diversification Opportunities for International Game and Genuine Parts
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and Genuine is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Genuine Parts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genuine Parts 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 Genuine Parts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genuine Parts has no effect on the direction of International Game i.e., International Game and Genuine Parts go up and down completely randomly.
Pair Corralation between International Game and Genuine Parts
Assuming the 90 days horizon International Game Technology is expected to generate 1.22 times more return on investment than Genuine Parts. However, International Game is 1.22 times more volatile than Genuine Parts. It trades about 0.01 of its potential returns per unit of risk. Genuine Parts is currently generating about -0.02 per unit of risk. If you would invest 1,966 in International Game Technology on September 12, 2024 and sell it today you would lose (116.00) from holding International Game Technology or give up 5.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Game Technology vs. Genuine Parts
Performance |
| Timeline |
| International Game |
| Genuine Parts |
International Game and Genuine Parts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Genuine Parts
The main advantage of trading using opposite International Game and Genuine Parts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, Genuine Parts 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 Genuine Parts will offset losses from the drop in Genuine Parts' 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 |
| Genuine Parts vs. ASSOC BR FOODS | Genuine Parts vs. Salesforce | Genuine Parts vs. Food Life Companies | Genuine Parts vs. United Natural Foods |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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