Correlation Between International Game and Light Wonder
Can any of the company-specific risk be diversified away by investing in both International Game and Light Wonder 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 Light Wonder 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 Light Wonder, you can compare the effects of market volatilities on International Game and Light Wonder 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 Light Wonder. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Light Wonder.
Diversification Opportunities for International Game and Light Wonder
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and Light is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Light Wonder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Wonder 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 Light Wonder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Wonder has no effect on the direction of International Game i.e., International Game and Light Wonder go up and down completely randomly.
Pair Corralation between International Game and Light Wonder
Considering the 90-day investment horizon International Game Technology is expected to under-perform the Light Wonder. In addition to that, International Game is 1.09 times more volatile than Light Wonder. It trades about -0.01 of its total potential returns per unit of risk. Light Wonder is currently generating about 0.05 per unit of volatility. If you would invest 6,373 in Light Wonder on August 23, 2024 and sell it today you would earn a total of 3,068 from holding Light Wonder or generate 48.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Game Technology vs. Light Wonder
Performance |
| Timeline |
| International Game |
| Light Wonder |
International Game and Light Wonder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Light Wonder
The main advantage of trading using opposite International Game and Light Wonder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, Light Wonder 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 Light Wonder will offset losses from the drop in Light Wonder's long position.| International Game vs. Genius Sports | International Game vs. Gan | International Game vs. Ballys Corp | International Game vs. Hims Hers Health |
| Light Wonder vs. Codere Online Corp | Light Wonder vs. Inspired Entertainment | Light Wonder vs. International Game Technology | Light Wonder vs. Accel Entertainment |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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