Correlation Between PlayAGS and Churchill Downs
Can any of the company-specific risk be diversified away by investing in both PlayAGS and Churchill Downs 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 PlayAGS and Churchill Downs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PlayAGS and Churchill Downs Incorporated, you can compare the effects of market volatilities on PlayAGS and Churchill Downs 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 PlayAGS with a short position of Churchill Downs. Check out your portfolio center. Please also check ongoing floating volatility patterns of PlayAGS and Churchill Downs.
Diversification Opportunities for PlayAGS and Churchill Downs
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PlayAGS and Churchill is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding PlayAGS and Churchill Downs Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Downs and PlayAGS 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 PlayAGS are associated (or correlated) with Churchill Downs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Churchill Downs has no effect on the direction of PlayAGS i.e., PlayAGS and Churchill Downs go up and down completely randomly.
Pair Corralation between PlayAGS and Churchill Downs
Considering the 90-day investment horizon PlayAGS is expected to generate 4.93 times less return on investment than Churchill Downs. But when comparing it to its historical volatility, PlayAGS is 9.71 times less risky than Churchill Downs. It trades about 0.04 of its potential returns per unit of risk. Churchill Downs Incorporated is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14,117 in Churchill Downs Incorporated on August 28, 2024 and sell it today you would earn a total of 66.00 from holding Churchill Downs Incorporated or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PlayAGS vs. Churchill Downs Incorporated
Performance |
| Timeline |
| PlayAGS |
| Churchill Downs |
PlayAGS and Churchill Downs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PlayAGS and Churchill Downs
The main advantage of trading using opposite PlayAGS and Churchill Downs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PlayAGS position performs unexpectedly, Churchill Downs 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 Churchill Downs will offset losses from the drop in Churchill Downs' long position.| PlayAGS vs. Light Wonder | PlayAGS vs. Everi Holdings | PlayAGS vs. Inspired Entertainment | PlayAGS vs. International Game Technology |
| Churchill Downs vs. Accel Entertainment | Churchill Downs vs. PlayAGS | Churchill Downs vs. International Game Technology | Churchill Downs vs. Everi Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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