Correlation Between PlayAGS and Light Wonder
Can any of the company-specific risk be diversified away by investing in both PlayAGS and Light Wonder 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 Light Wonder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PlayAGS and Light Wonder, you can compare the effects of market volatilities on PlayAGS and Light Wonder 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 Light Wonder. Check out your portfolio center. Please also check ongoing floating volatility patterns of PlayAGS and Light Wonder.
Diversification Opportunities for PlayAGS and Light Wonder
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PlayAGS and Light is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding PlayAGS and Light Wonder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Wonder 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 Light Wonder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Wonder has no effect on the direction of PlayAGS i.e., PlayAGS and Light Wonder go up and down completely randomly.
Pair Corralation between PlayAGS and Light Wonder
Considering the 90-day investment horizon PlayAGS is expected to generate 1.13 times more return on investment than Light Wonder. However, PlayAGS is 1.13 times more volatile than Light Wonder. It trades about 0.08 of its potential returns per unit of risk. Light Wonder is currently generating about 0.03 per unit of risk. If you would invest 765.00 in PlayAGS on August 26, 2024 and sell it today you would earn a total of 401.00 from holding PlayAGS or generate 52.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PlayAGS vs. Light Wonder
Performance |
| Timeline |
| PlayAGS |
| Light Wonder |
PlayAGS and Light Wonder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PlayAGS and Light Wonder
The main advantage of trading using opposite PlayAGS and Light Wonder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PlayAGS position performs unexpectedly, Light Wonder 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 Light Wonder will offset losses from the drop in Light Wonder's long position.| PlayAGS vs. Light Wonder | PlayAGS vs. Everi Holdings | PlayAGS vs. Inspired Entertainment | PlayAGS vs. International Game Technology |
| Light Wonder vs. Codere Online Corp | Light Wonder vs. Inspired Entertainment | Light Wonder vs. International Game Technology | Light Wonder vs. Accel Entertainment |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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