Correlation Between Light Wonder and Royal Wins
Can any of the company-specific risk be diversified away by investing in both Light Wonder and Royal Wins 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 Royal Wins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Light Wonder and Royal Wins, you can compare the effects of market volatilities on Light Wonder and Royal Wins 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 Royal Wins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Light Wonder and Royal Wins.
Diversification Opportunities for Light Wonder and Royal Wins
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Light and Royal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Light Wonder and Royal Wins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Wins 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 Royal Wins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Wins has no effect on the direction of Light Wonder i.e., Light Wonder and Royal Wins go up and down completely randomly.
Pair Corralation between Light Wonder and Royal Wins
Considering the 90-day investment horizon Light Wonder is expected to generate 16.48 times less return on investment than Royal Wins. But when comparing it to its historical volatility, Light Wonder is 13.71 times less risky than Royal Wins. It trades about 0.05 of its potential returns per unit of risk. Royal Wins is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Royal Wins on August 24, 2024 and sell it today you would lose (15.20) from holding Royal Wins or give up 84.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Light Wonder vs. Royal Wins
Performance |
| Timeline |
| Light Wonder |
| Royal Wins |
Light Wonder and Royal Wins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Light Wonder and Royal Wins
The main advantage of trading using opposite Light Wonder and Royal Wins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Light Wonder position performs unexpectedly, Royal Wins 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 Royal Wins will offset losses from the drop in Royal Wins' long position.| Light Wonder vs. Codere Online Corp | Light Wonder vs. Inspired Entertainment | Light Wonder vs. International Game Technology | Light Wonder vs. Accel Entertainment |
| Royal Wins vs. Real Luck Group | Royal Wins vs. Betmakers Technology Group | Royal Wins vs. Jackpot Digital |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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