Correlation Between International Game and Yum Brands
Can any of the company-specific risk be diversified away by investing in both International Game and Yum Brands 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 Yum Brands 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 Yum Brands, you can compare the effects of market volatilities on International Game and Yum Brands 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 Yum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Yum Brands.
Diversification Opportunities for International Game and Yum Brands
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and Yum is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Yum Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum Brands 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 Yum Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yum Brands has no effect on the direction of International Game i.e., International Game and Yum Brands go up and down completely randomly.
Pair Corralation between International Game and Yum Brands
Considering the 90-day investment horizon International Game Technology is expected to under-perform the Yum Brands. In addition to that, International Game is 1.57 times more volatile than Yum Brands. It trades about -0.09 of its total potential returns per unit of risk. Yum Brands is currently generating about 0.04 per unit of volatility. If you would invest 13,721 in Yum Brands on September 3, 2024 and sell it today you would earn a total of 173.00 from holding Yum Brands or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Game Technology vs. Yum Brands
Performance |
| Timeline |
| International Game |
| Yum Brands |
International Game and Yum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Yum Brands
The main advantage of trading using opposite International Game and Yum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, Yum Brands 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 Yum Brands will offset losses from the drop in Yum Brands' long position.| International Game vs. PlayAGS | International Game vs. Canterbury Park Holding | International Game vs. Light Wonder | International Game vs. Everi Holdings |
| Yum Brands vs. Highway Holdings Limited | Yum Brands vs. QCR Holdings | Yum Brands vs. Partner Communications | Yum Brands vs. Acumen Pharmaceuticals |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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