Correlation Between International Game and United Utilities
Can any of the company-specific risk be diversified away by investing in both International Game and United Utilities 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 United Utilities 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 United Utilities Group, you can compare the effects of market volatilities on International Game and United Utilities 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 United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and United Utilities.
Diversification Opportunities for International Game and United Utilities
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and United is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities 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 United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of International Game i.e., International Game and United Utilities go up and down completely randomly.
Pair Corralation between International Game and United Utilities
Assuming the 90 days horizon International Game Technology is expected to under-perform the United Utilities. In addition to that, International Game is 1.33 times more volatile than United Utilities Group. It trades about 0.0 of its total potential returns per unit of risk. United Utilities Group is currently generating about 0.04 per unit of volatility. If you would invest 1,085 in United Utilities Group on September 5, 2024 and sell it today you would earn a total of 275.00 from holding United Utilities Group or generate 25.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
International Game Technology vs. United Utilities Group
Performance |
| Timeline |
| International Game |
| United Utilities |
International Game and United Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and United Utilities
The main advantage of trading using opposite International Game and United Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, United Utilities 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 United Utilities will offset losses from the drop in United Utilities' long position.| International Game vs. Flutter Entertainment PLC | International Game vs. Evolution AB | International Game vs. Churchill Downs Incorporated | International Game vs. Churchill Downs Incorporated |
| United Utilities vs. Superior Plus Corp | United Utilities vs. NMI Holdings | United Utilities vs. Origin Agritech | United Utilities 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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