Correlation Between International Game and DraftKings
Can any of the company-specific risk be diversified away by investing in both International Game and DraftKings 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 International Game and DraftKings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Game Technology and DraftKings, you can compare the effects of market volatilities on International Game and DraftKings 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 International Game with a short position of DraftKings. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and DraftKings.
Diversification Opportunities for International Game and DraftKings
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and DraftKings is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and DraftKings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DraftKings and International Game 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 International Game Technology are associated (or correlated) with DraftKings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DraftKings has no effect on the direction of International Game i.e., International Game and DraftKings go up and down completely randomly.
Pair Corralation between International Game and DraftKings
Considering the 90-day investment horizon International Game Technology is expected to under-perform the DraftKings. But the stock apears to be less risky and, when comparing its historical volatility, International Game Technology is 1.68 times less risky than DraftKings. The stock trades about -0.23 of its potential returns per unit of risk. The DraftKings is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 3,656 in DraftKings on August 28, 2024 and sell it today you would earn a total of 644.00 from holding DraftKings or generate 17.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Game Technology vs. DraftKings
Performance |
| Timeline |
| International Game |
| DraftKings |
International Game and DraftKings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and DraftKings
The main advantage of trading using opposite International Game and DraftKings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, DraftKings 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 DraftKings will offset losses from the drop in DraftKings' long position.| International Game vs. Accel Entertainment | International Game vs. PlayAGS | International Game vs. Everi Holdings | International Game vs. Light Wonder |
| DraftKings vs. Light Wonder | DraftKings vs. International Game Technology | DraftKings vs. Everi Holdings | DraftKings vs. PlayAGS |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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