Correlation Between Inspired Entertainment and Neogames
Can any of the company-specific risk be diversified away by investing in both Inspired Entertainment and Neogames 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 Neogames into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inspired Entertainment and Neogames SA, you can compare the effects of market volatilities on Inspired Entertainment and Neogames 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 Neogames. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspired Entertainment and Neogames.
Diversification Opportunities for Inspired Entertainment and Neogames
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inspired and Neogames is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Inspired Entertainment and Neogames SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogames SA 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 Neogames. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogames SA has no effect on the direction of Inspired Entertainment i.e., Inspired Entertainment and Neogames go up and down completely randomly.
Pair Corralation between Inspired Entertainment and Neogames
If you would invest 904.00 in Inspired Entertainment on August 24, 2024 and sell it today you would earn a total of 91.00 from holding Inspired Entertainment or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Inspired Entertainment vs. Neogames SA
Performance |
| Timeline |
| Inspired Entertainment |
| Neogames SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Inspired Entertainment and Neogames Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspired Entertainment and Neogames
The main advantage of trading using opposite Inspired Entertainment and Neogames positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspired Entertainment position performs unexpectedly, Neogames 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 Neogames will offset losses from the drop in Neogames' long position.| Inspired Entertainment vs. Canterbury Park Holding | Inspired Entertainment vs. Accel Entertainment | Inspired Entertainment vs. Gambling Group | Inspired Entertainment vs. PlayAGS |
| Neogames vs. Accel Entertainment | Neogames vs. PlayAGS | Neogames vs. International Game Technology | Neogames vs. Everi Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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