Correlation Between International Game and HR Block
Can any of the company-specific risk be diversified away by investing in both International Game and HR Block 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 HR Block 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 HR Block, you can compare the effects of market volatilities on International Game and HR Block 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 HR Block. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and HR Block.
Diversification Opportunities for International Game and HR Block
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between International and HRB is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and HR Block in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HR Block 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 HR Block. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HR Block has no effect on the direction of International Game i.e., International Game and HR Block go up and down completely randomly.
Pair Corralation between International Game and HR Block
Considering the 90-day investment horizon International Game Technology is expected to under-perform the HR Block. But the stock apears to be less risky and, when comparing its historical volatility, International Game Technology is 1.57 times less risky than HR Block. The stock trades about -0.22 of its potential returns per unit of risk. The HR Block is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 6,003 in HR Block on August 26, 2024 and sell it today you would lose (173.00) from holding HR Block or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Game Technology vs. HR Block
Performance |
| Timeline |
| International Game |
| HR Block |
International Game and HR Block Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and HR Block
The main advantage of trading using opposite International Game and HR Block positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, HR Block 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 HR Block will offset losses from the drop in HR Block's long position.| International Game vs. Accel Entertainment | International Game vs. PlayAGS | International Game vs. Everi Holdings | International Game vs. Light Wonder |
| HR Block vs. Bright Horizons Family | HR Block vs. Smart Share Global | HR Block vs. Mister Car Wash | HR Block vs. Carriage Services |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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