Correlation Between International Game and GAMESTOP
Can any of the company-specific risk be diversified away by investing in both International Game and GAMESTOP 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 GAMESTOP 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 GAMESTOP, you can compare the effects of market volatilities on International Game and GAMESTOP 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 GAMESTOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and GAMESTOP.
Diversification Opportunities for International Game and GAMESTOP
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and GAMESTOP is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP 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 GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of International Game i.e., International Game and GAMESTOP go up and down completely randomly.
Pair Corralation between International Game and GAMESTOP
Assuming the 90 days horizon International Game Technology is expected to under-perform the GAMESTOP. But the stock apears to be less risky and, when comparing its historical volatility, International Game Technology is 1.35 times less risky than GAMESTOP. The stock trades about -0.11 of its potential returns per unit of risk. The GAMESTOP is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 2,099 in GAMESTOP on August 30, 2024 and sell it today you would earn a total of 838.00 from holding GAMESTOP or generate 39.92% 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. GAMESTOP
Performance |
| Timeline |
| International Game |
| GAMESTOP |
International Game and GAMESTOP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and GAMESTOP
The main advantage of trading using opposite International Game and GAMESTOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, GAMESTOP 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 GAMESTOP will offset losses from the drop in GAMESTOP's long position.| International Game vs. Playa Hotels Resorts | International Game vs. Summit Hotel Properties | International Game vs. MELIA HOTELS | International Game vs. Platinum Investment Management |
| GAMESTOP vs. Apple Inc | GAMESTOP vs. Apple Inc | GAMESTOP vs. Superior Plus Corp | GAMESTOP vs. SIVERS SEMICONDUCTORS AB |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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