Correlation Between Churchill Downs and International Game
Can any of the company-specific risk be diversified away by investing in both Churchill Downs 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 Churchill Downs and International Game 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 International Game Technology, you can compare the effects of market volatilities on Churchill Downs 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 Churchill Downs with a short position of International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Churchill Downs and International Game.
Diversification Opportunities for Churchill Downs and International Game
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Churchill and International is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Churchill Downs Incorporated and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game 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 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 Churchill Downs i.e., Churchill Downs and International Game go up and down completely randomly.
Pair Corralation between Churchill Downs and International Game
Assuming the 90 days trading horizon Churchill Downs Incorporated is expected to generate 0.77 times more return on investment than International Game. However, Churchill Downs Incorporated is 1.31 times less risky than International Game. It trades about 0.19 of its potential returns per unit of risk. International Game Technology is currently generating about -0.02 per unit of risk. If you would invest 12,600 in Churchill Downs Incorporated on September 4, 2024 and sell it today you would earn a total of 1,000.00 from holding Churchill Downs Incorporated or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Churchill Downs Incorporated vs. International Game Technology
Performance |
| Timeline |
| Churchill Downs |
| International Game |
Churchill Downs and International Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Churchill Downs and International Game
The main advantage of trading using opposite Churchill Downs and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Churchill Downs 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.| Churchill Downs vs. Flutter Entertainment PLC | Churchill Downs vs. Evolution AB | Churchill Downs vs. Churchill Downs Incorporated | Churchill Downs vs. Scientific Games |
| International Game vs. Flutter Entertainment PLC | International Game vs. Evolution AB | International Game vs. Churchill Downs Incorporated | International Game vs. Churchill Downs Incorporated |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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