Correlation Between Aristocrat Leisure and Galaxy Gaming
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure and Galaxy Gaming 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 Aristocrat Leisure and Galaxy Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure Limited and Galaxy Gaming, you can compare the effects of market volatilities on Aristocrat Leisure and Galaxy Gaming 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 Aristocrat Leisure with a short position of Galaxy Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and Galaxy Gaming.
Diversification Opportunities for Aristocrat Leisure and Galaxy Gaming
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aristocrat and Galaxy is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure Limited and Galaxy Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Gaming and Aristocrat Leisure 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 Aristocrat Leisure Limited are associated (or correlated) with Galaxy Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Gaming has no effect on the direction of Aristocrat Leisure i.e., Aristocrat Leisure and Galaxy Gaming go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and Galaxy Gaming
Assuming the 90 days horizon Aristocrat Leisure Limited is expected to generate 2.81 times more return on investment than Galaxy Gaming. However, Aristocrat Leisure is 2.81 times more volatile than Galaxy Gaming. It trades about 0.17 of its potential returns per unit of risk. Galaxy Gaming is currently generating about 0.07 per unit of risk. If you would invest 3,706 in Aristocrat Leisure Limited on August 28, 2024 and sell it today you would earn a total of 473.00 from holding Aristocrat Leisure Limited or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aristocrat Leisure Limited vs. Galaxy Gaming
Performance |
| Timeline |
| Aristocrat Leisure |
| Galaxy Gaming |
Aristocrat Leisure and Galaxy Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and Galaxy Gaming
The main advantage of trading using opposite Aristocrat Leisure and Galaxy Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure position performs unexpectedly, Galaxy Gaming 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 Galaxy Gaming will offset losses from the drop in Galaxy Gaming's long position.| Aristocrat Leisure vs. Real Luck Group | Aristocrat Leisure vs. Betmakers Technology Group | Aristocrat Leisure vs. Jackpot Digital |
| Galaxy Gaming vs. Intema Solutions | Galaxy Gaming vs. 888 Holdings | Galaxy Gaming vs. Royal Wins | Galaxy Gaming vs. Real Luck Group |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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