Correlation Between International Game and Hang Seng
Can any of the company-specific risk be diversified away by investing in both International Game and Hang Seng 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 Hang Seng 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 Hang Seng Bank, you can compare the effects of market volatilities on International Game and Hang Seng 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 Hang Seng. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Hang Seng.
Diversification Opportunities for International Game and Hang Seng
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Hang is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Hang Seng Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Seng Bank 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 Hang Seng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Seng Bank has no effect on the direction of International Game i.e., International Game and Hang Seng go up and down completely randomly.
Pair Corralation between International Game and Hang Seng
Assuming the 90 days horizon International Game is expected to generate 2.03 times less return on investment than Hang Seng. In addition to that, International Game is 1.19 times more volatile than Hang Seng Bank. It trades about 0.09 of its total potential returns per unit of risk. Hang Seng Bank is currently generating about 0.23 per unit of volatility. If you would invest 1,170 in Hang Seng Bank on November 30, 2024 and sell it today you would earn a total of 180.00 from holding Hang Seng Bank or generate 15.38% 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. Hang Seng Bank
Performance |
| Timeline |
| International Game |
| Hang Seng Bank |
International Game and Hang Seng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Hang Seng
The main advantage of trading using opposite International Game and Hang Seng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, Hang Seng 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 Hang Seng will offset losses from the drop in Hang Seng's long position.| International Game vs. GAZTRTECHNIUADR15EO01 | International Game vs. FORTRESS BIOTECHPRFA 25 | International Game vs. GRIFFIN MINING LTD | International Game vs. SOFI TECHNOLOGIES |
| Hang Seng vs. China Resources Beer | Hang Seng vs. Federal Agricultural Mortgage | Hang Seng vs. Boston Beer Co | Hang Seng vs. Tsingtao Brewery |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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