Correlation Between International Game and Laureate Education
Can any of the company-specific risk be diversified away by investing in both International Game and Laureate Education 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 Laureate Education 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 Laureate Education, you can compare the effects of market volatilities on International Game and Laureate Education 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 Laureate Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Laureate Education.
Diversification Opportunities for International Game and Laureate Education
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Laureate is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Laureate Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laureate Education 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 Laureate Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laureate Education has no effect on the direction of International Game i.e., International Game and Laureate Education go up and down completely randomly.
Pair Corralation between International Game and Laureate Education
Assuming the 90 days horizon International Game Technology is expected to under-perform the Laureate Education. But the stock apears to be less risky and, when comparing its historical volatility, International Game Technology is 1.06 times less risky than Laureate Education. The stock trades about -0.14 of its potential returns per unit of risk. The Laureate Education is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,750 in Laureate Education on November 2, 2024 and sell it today you would earn a total of 20.00 from holding Laureate Education or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Game Technology vs. Laureate Education
Performance |
| Timeline |
| International Game |
| Laureate Education |
International Game and Laureate Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Laureate Education
The main advantage of trading using opposite International Game and Laureate Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, Laureate Education 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 Laureate Education will offset losses from the drop in Laureate Education's long position.| International Game vs. Flutter Entertainment PLC | International Game vs. Churchill Downs Incorporated | International Game vs. La Franaise des | International Game vs. Scientific Games |
| Laureate Education vs. GRUPO CARSO A1 | Laureate Education vs. Grupo Carso SAB | Laureate Education vs. Hitachi Construction Machinery | Laureate Education vs. Daito Trust Construction |
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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