Correlation Between Inspired Entertainment and Sonder Holdings
Can any of the company-specific risk be diversified away by investing in both Inspired Entertainment and Sonder 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 Sonder 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 Sonder Holdings, you can compare the effects of market volatilities on Inspired Entertainment and Sonder 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 Sonder Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspired Entertainment and Sonder Holdings.
Diversification Opportunities for Inspired Entertainment and Sonder Holdings
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Inspired and Sonder is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Inspired Entertainment and Sonder Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonder 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 Sonder Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonder Holdings has no effect on the direction of Inspired Entertainment i.e., Inspired Entertainment and Sonder Holdings go up and down completely randomly.
Pair Corralation between Inspired Entertainment and Sonder Holdings
Given the investment horizon of 90 days Inspired Entertainment is expected to under-perform the Sonder Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Inspired Entertainment is 3.62 times less risky than Sonder Holdings. The stock trades about 0.0 of its potential returns per unit of risk. The Sonder Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,740 in Sonder Holdings on September 3, 2024 and sell it today you would lose (2,360) from holding Sonder Holdings or give up 86.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspired Entertainment vs. Sonder Holdings
Performance |
| Timeline |
| Inspired Entertainment |
| Sonder Holdings |
Inspired Entertainment and Sonder Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspired Entertainment and Sonder Holdings
The main advantage of trading using opposite Inspired Entertainment and Sonder Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspired Entertainment position performs unexpectedly, Sonder 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 Sonder Holdings will offset losses from the drop in Sonder Holdings' long position.| Inspired Entertainment vs. Canterbury Park Holding | Inspired Entertainment vs. Accel Entertainment | Inspired Entertainment vs. Gambling Group | Inspired Entertainment vs. PlayAGS |
| Sonder Holdings vs. Wyndham Hotels Resorts | Sonder Holdings vs. InterContinental Hotels Group | Sonder Holdings vs. Hyatt Hotels | Sonder Holdings vs. Hilton Worldwide 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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