Correlation Between PlayAGS and Gentherm
Can any of the company-specific risk be diversified away by investing in both PlayAGS and Gentherm 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 Gentherm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PlayAGS and Gentherm, you can compare the effects of market volatilities on PlayAGS and Gentherm 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 Gentherm. Check out your portfolio center. Please also check ongoing floating volatility patterns of PlayAGS and Gentherm.
Diversification Opportunities for PlayAGS and Gentherm
Pay attention - limited upside
The 3 months correlation between PlayAGS and Gentherm is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding PlayAGS and Gentherm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentherm 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 Gentherm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentherm has no effect on the direction of PlayAGS i.e., PlayAGS and Gentherm go up and down completely randomly.
Pair Corralation between PlayAGS and Gentherm
Considering the 90-day investment horizon PlayAGS is expected to generate 19.3 times less return on investment than Gentherm. But when comparing it to its historical volatility, PlayAGS is 7.66 times less risky than Gentherm. It trades about 0.06 of its potential returns per unit of risk. Gentherm is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,030 in Gentherm on August 24, 2024 and sell it today you would earn a total of 233.00 from holding Gentherm or generate 5.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PlayAGS vs. Gentherm
Performance |
| Timeline |
| PlayAGS |
| Gentherm |
PlayAGS and Gentherm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PlayAGS and Gentherm
The main advantage of trading using opposite PlayAGS and Gentherm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PlayAGS position performs unexpectedly, Gentherm 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 Gentherm will offset losses from the drop in Gentherm's long position.| PlayAGS vs. Light Wonder | PlayAGS vs. Everi Holdings | PlayAGS vs. Inspired Entertainment | PlayAGS vs. International Game Technology |
| Gentherm vs. Monro Muffler Brake | Gentherm vs. Motorcar Parts of | Gentherm vs. Standard Motor Products | Gentherm vs. Stoneridge |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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