Correlation Between Pentair Plc and International Game
Can any of the company-specific risk be diversified away by investing in both Pentair Plc and International Game 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 Pentair Plc and International Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pentair plc and International Game Technology, you can compare the effects of market volatilities on Pentair Plc and International Game 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 Pentair Plc with a short position of International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pentair Plc and International Game.
Diversification Opportunities for Pentair Plc and International Game
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pentair and International is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Pentair plc and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and Pentair Plc 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 Pentair plc are associated (or correlated) with International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of Pentair Plc i.e., Pentair Plc and International Game go up and down completely randomly.
Pair Corralation between Pentair Plc and International Game
Assuming the 90 days horizon Pentair plc is expected to generate 0.6 times more return on investment than International Game. However, Pentair plc is 1.68 times less risky than International Game. It trades about 0.07 of its potential returns per unit of risk. International Game Technology is currently generating about 0.01 per unit of risk. If you would invest 9,614 in Pentair plc on October 30, 2024 and sell it today you would earn a total of 116.00 from holding Pentair plc or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pentair plc vs. International Game Technology
Performance |
| Timeline |
| Pentair plc |
| International Game |
Pentair Plc and International Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pentair Plc and International Game
The main advantage of trading using opposite Pentair Plc and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pentair Plc position performs unexpectedly, International Game 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 International Game will offset losses from the drop in International Game's long position.| Pentair Plc vs. Gladstone Investment | Pentair Plc vs. THRACE PLASTICS | Pentair Plc vs. REINET INVESTMENTS SCA | Pentair Plc vs. AGNC INVESTMENT |
| International Game vs. Flutter Entertainment PLC | International Game vs. Churchill Downs Incorporated | International Game vs. La Franaise des | International Game vs. Scientific Games |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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