Correlation Between Light Wonder and FansUnite Entertainment
Can any of the company-specific risk be diversified away by investing in both Light Wonder and FansUnite 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 Light Wonder and FansUnite Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Light Wonder and FansUnite Entertainment, you can compare the effects of market volatilities on Light Wonder and FansUnite 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 Light Wonder with a short position of FansUnite Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Light Wonder and FansUnite Entertainment.
Diversification Opportunities for Light Wonder and FansUnite Entertainment
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Light and FansUnite is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Light Wonder and FansUnite Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FansUnite Entertainment and Light Wonder 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 Light Wonder are associated (or correlated) with FansUnite Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FansUnite Entertainment has no effect on the direction of Light Wonder i.e., Light Wonder and FansUnite Entertainment go up and down completely randomly.
Pair Corralation between Light Wonder and FansUnite Entertainment
Considering the 90-day investment horizon Light Wonder is expected to generate 94.63 times less return on investment than FansUnite Entertainment. But when comparing it to its historical volatility, Light Wonder is 27.8 times less risky than FansUnite Entertainment. It trades about 0.09 of its potential returns per unit of risk. FansUnite Entertainment is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 0.01 in FansUnite Entertainment on September 5, 2024 and sell it today you would earn a total of 0.05 from holding FansUnite Entertainment or generate 500.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Light Wonder vs. FansUnite Entertainment
Performance |
| Timeline |
| Light Wonder |
| FansUnite Entertainment |
Light Wonder and FansUnite Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Light Wonder and FansUnite Entertainment
The main advantage of trading using opposite Light Wonder and FansUnite Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Light Wonder position performs unexpectedly, FansUnite 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 FansUnite Entertainment will offset losses from the drop in FansUnite Entertainment's long position.| Light Wonder vs. Codere Online Corp | Light Wonder vs. Inspired Entertainment | Light Wonder vs. International Game Technology | Light Wonder vs. Accel Entertainment |
| FansUnite Entertainment vs. Everi Holdings | FansUnite Entertainment vs. Intema Solutions | FansUnite Entertainment vs. Light Wonder | FansUnite Entertainment vs. International Game Technology |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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