Correlation Between Inspired Entertainment and Esports Entertainment
Can any of the company-specific risk be diversified away by investing in both Inspired Entertainment and Esports Entertainment 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 Inspired Entertainment and Esports Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inspired Entertainment and Esports Entertainment Group, you can compare the effects of market volatilities on Inspired Entertainment and Esports Entertainment 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 Inspired Entertainment with a short position of Esports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspired Entertainment and Esports Entertainment.
Diversification Opportunities for Inspired Entertainment and Esports Entertainment
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Inspired and Esports is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Inspired Entertainment and Esports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esports Entertainment and Inspired Entertainment 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 Inspired Entertainment are associated (or correlated) with Esports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esports Entertainment has no effect on the direction of Inspired Entertainment i.e., Inspired Entertainment and Esports Entertainment go up and down completely randomly.
Pair Corralation between Inspired Entertainment and Esports Entertainment
Given the investment horizon of 90 days Inspired Entertainment is expected to generate 0.3 times more return on investment than Esports Entertainment. However, Inspired Entertainment is 3.34 times less risky than Esports Entertainment. It trades about 0.0 of its potential returns per unit of risk. Esports Entertainment Group is currently generating about -0.15 per unit of risk. If you would invest 1,248 in Inspired Entertainment on August 28, 2024 and sell it today you would lose (262.00) from holding Inspired Entertainment or give up 20.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.65% |
| Values | Daily Returns |
Inspired Entertainment vs. Esports Entertainment Group
Performance |
| Timeline |
| Inspired Entertainment |
| Esports Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Inspired Entertainment and Esports Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspired Entertainment and Esports Entertainment
The main advantage of trading using opposite Inspired Entertainment and Esports Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspired Entertainment position performs unexpectedly, Esports Entertainment 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 Esports Entertainment will offset losses from the drop in Esports Entertainment's long position.| Inspired Entertainment vs. Canterbury Park Holding | Inspired Entertainment vs. Accel Entertainment | Inspired Entertainment vs. Gambling Group | Inspired Entertainment vs. PlayAGS |
| Esports Entertainment vs. Rush Street Interactive | Esports Entertainment vs. Everi Holdings | Esports Entertainment vs. Inspired Entertainment | Esports Entertainment vs. PointsBet Holdings Limited |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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