Correlation Between CeoTronics and International Game
Can any of the company-specific risk be diversified away by investing in both CeoTronics and International Game 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 CeoTronics and International Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CeoTronics AG and International Game Technology, you can compare the effects of market volatilities on CeoTronics and International Game 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 CeoTronics with a short position of International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and International Game.
Diversification Opportunities for CeoTronics and International Game
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between CeoTronics and International is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and CeoTronics 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 CeoTronics AG are associated (or correlated) with International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of CeoTronics i.e., CeoTronics and International Game go up and down completely randomly.
Pair Corralation between CeoTronics and International Game
Assuming the 90 days trading horizon CeoTronics AG is expected to under-perform the International Game. But the stock apears to be less risky and, when comparing its historical volatility, CeoTronics AG is 1.06 times less risky than International Game. The stock trades about -0.28 of its potential returns per unit of risk. The International Game Technology is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 1,800 in International Game Technology on October 12, 2024 and sell it today you would lose (110.00) from holding International Game Technology or give up 6.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
CeoTronics AG vs. International Game Technology
Performance |
Timeline |
CeoTronics AG |
International Game |
CeoTronics and International Game Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CeoTronics and International Game
The main advantage of trading using opposite CeoTronics and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CeoTronics position performs unexpectedly, International Game 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 International Game will offset losses from the drop in International Game's long position.CeoTronics vs. Acadia Healthcare | CeoTronics vs. Garofalo Health Care | CeoTronics vs. Wenzhou Kangning Hospital | CeoTronics vs. Haier Smart Home |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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