Correlation Between Churchill Downs and PlayAGS
Can any of the company-specific risk be diversified away by investing in both Churchill Downs and PlayAGS 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 Churchill Downs and PlayAGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Churchill Downs Incorporated and PlayAGS, you can compare the effects of market volatilities on Churchill Downs and PlayAGS 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 Churchill Downs with a short position of PlayAGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Churchill Downs and PlayAGS.
Diversification Opportunities for Churchill Downs and PlayAGS
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Churchill and PlayAGS is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Churchill Downs Incorporated and PlayAGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayAGS and Churchill Downs 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 Churchill Downs Incorporated are associated (or correlated) with PlayAGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayAGS has no effect on the direction of Churchill Downs i.e., Churchill Downs and PlayAGS go up and down completely randomly.
Pair Corralation between Churchill Downs and PlayAGS
Given the investment horizon of 90 days Churchill Downs Incorporated is expected to under-perform the PlayAGS. In addition to that, Churchill Downs is 2.01 times more volatile than PlayAGS. It trades about -0.24 of its total potential returns per unit of risk. PlayAGS is currently generating about 0.33 per unit of volatility. If you would invest 1,149 in PlayAGS on October 21, 2024 and sell it today you would earn a total of 37.00 from holding PlayAGS or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Churchill Downs Incorporated vs. PlayAGS
Performance |
| Timeline |
| Churchill Downs |
| PlayAGS |
Churchill Downs and PlayAGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Churchill Downs and PlayAGS
The main advantage of trading using opposite Churchill Downs and PlayAGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Churchill Downs position performs unexpectedly, PlayAGS 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 PlayAGS will offset losses from the drop in PlayAGS's long position.| Churchill Downs vs. Accel Entertainment | Churchill Downs vs. PlayAGS | Churchill Downs vs. International Game Technology | Churchill Downs vs. Everi Holdings |
| PlayAGS vs. Light Wonder | PlayAGS vs. Everi Holdings | PlayAGS vs. Inspired Entertainment | PlayAGS vs. International Game Technology |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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