Correlation Between International Game and Stoneridge
Can any of the company-specific risk be diversified away by investing in both International Game and Stoneridge 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 Stoneridge 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 Stoneridge, you can compare the effects of market volatilities on International Game and Stoneridge 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 Stoneridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Stoneridge.
Diversification Opportunities for International Game and Stoneridge
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between International and Stoneridge is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Stoneridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoneridge 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 Stoneridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stoneridge has no effect on the direction of International Game i.e., International Game and Stoneridge go up and down completely randomly.
Pair Corralation between International Game and Stoneridge
Considering the 90-day investment horizon International Game Technology is expected to generate 0.71 times more return on investment than Stoneridge. However, International Game Technology is 1.41 times less risky than Stoneridge. It trades about -0.05 of its potential returns per unit of risk. Stoneridge is currently generating about -0.1 per unit of risk. If you would invest 2,680 in International Game Technology on August 27, 2024 and sell it today you would lose (756.00) from holding International Game Technology or give up 28.21% 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. Stoneridge
Performance |
| Timeline |
| International Game |
| Stoneridge |
International Game and Stoneridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Stoneridge
The main advantage of trading using opposite International Game and Stoneridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, Stoneridge 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 Stoneridge will offset losses from the drop in Stoneridge's long position.| International Game vs. Accel Entertainment | International Game vs. PlayAGS | International Game vs. Everi Holdings | International Game vs. Light Wonder |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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