Correlation Between Inspired Entertainment and Limbach Holdings
Can any of the company-specific risk be diversified away by investing in both Inspired Entertainment and Limbach Holdings 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 Limbach Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inspired Entertainment and Limbach Holdings, you can compare the effects of market volatilities on Inspired Entertainment and Limbach Holdings 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 Limbach Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspired Entertainment and Limbach Holdings.
Diversification Opportunities for Inspired Entertainment and Limbach Holdings
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inspired and Limbach is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Inspired Entertainment and Limbach Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limbach Holdings 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 Limbach Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limbach Holdings has no effect on the direction of Inspired Entertainment i.e., Inspired Entertainment and Limbach Holdings go up and down completely randomly.
Pair Corralation between Inspired Entertainment and Limbach Holdings
Given the investment horizon of 90 days Inspired Entertainment is expected to generate 4.23 times less return on investment than Limbach Holdings. But when comparing it to its historical volatility, Inspired Entertainment is 1.77 times less risky than Limbach Holdings. It trades about 0.1 of its potential returns per unit of risk. Limbach Holdings is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 6,036 in Limbach Holdings on September 3, 2024 and sell it today you would earn a total of 3,913 from holding Limbach Holdings or generate 64.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspired Entertainment vs. Limbach Holdings
Performance |
| Timeline |
| Inspired Entertainment |
| Limbach Holdings |
Inspired Entertainment and Limbach Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspired Entertainment and Limbach Holdings
The main advantage of trading using opposite Inspired Entertainment and Limbach Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspired Entertainment position performs unexpectedly, Limbach Holdings 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 Limbach Holdings will offset losses from the drop in Limbach Holdings' long position.| Inspired Entertainment vs. Canterbury Park Holding | Inspired Entertainment vs. Accel Entertainment | Inspired Entertainment vs. Gambling Group | Inspired Entertainment vs. PlayAGS |
| Limbach Holdings vs. MYR Group | Limbach Holdings vs. Granite Construction Incorporated | Limbach Holdings vs. Construction Partners | Limbach Holdings vs. Great Lakes Dredge |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |