Correlation Between International Game and Guangdong Investment
Can any of the company-specific risk be diversified away by investing in both International Game and Guangdong Investment 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 Guangdong Investment 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 Guangdong Investment Limited, you can compare the effects of market volatilities on International Game and Guangdong Investment 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 Guangdong Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Guangdong Investment.
Diversification Opportunities for International Game and Guangdong Investment
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and Guangdong is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Guangdong Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Investment 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 Guangdong Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Investment has no effect on the direction of International Game i.e., International Game and Guangdong Investment go up and down completely randomly.
Pair Corralation between International Game and Guangdong Investment
Assuming the 90 days horizon International Game Technology is expected to under-perform the Guangdong Investment. But the stock apears to be less risky and, when comparing its historical volatility, International Game Technology is 3.23 times less risky than Guangdong Investment. The stock trades about -0.01 of its potential returns per unit of risk. The Guangdong Investment Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Guangdong Investment Limited on October 14, 2024 and sell it today you would earn a total of 61.00 from holding Guangdong Investment Limited or generate 381.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
International Game Technology vs. Guangdong Investment Limited
Performance |
Timeline |
International Game |
Guangdong Investment |
International Game and Guangdong Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with International Game and Guangdong Investment
The main advantage of trading using opposite International Game and Guangdong Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, Guangdong Investment 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 Guangdong Investment will offset losses from the drop in Guangdong Investment's long position.International Game vs. SK TELECOM TDADR | International Game vs. Highlight Communications AG | International Game vs. OFFICE DEPOT | International Game vs. Shenandoah Telecommunications |
Guangdong Investment vs. Boyd Gaming | Guangdong Investment vs. CONTAGIOUS GAMING INC | Guangdong Investment vs. Nomad Foods | Guangdong Investment vs. International Game Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |