Correlation Between SPORTING and International Game
Can any of the company-specific risk be diversified away by investing in both SPORTING 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 SPORTING and International Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORTING and International Game Technology, you can compare the effects of market volatilities on SPORTING 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 SPORTING with a short position of International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORTING and International Game.
Diversification Opportunities for SPORTING and International Game
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPORTING and International is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and SPORTING 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 SPORTING 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 SPORTING i.e., SPORTING and International Game go up and down completely randomly.
Pair Corralation between SPORTING and International Game
Assuming the 90 days trading horizon SPORTING is expected to generate 2.03 times more return on investment than International Game. However, SPORTING is 2.03 times more volatile than International Game Technology. It trades about -0.06 of its potential returns per unit of risk. International Game Technology is currently generating about -0.17 per unit of risk. If you would invest 106.00 in SPORTING on October 11, 2024 and sell it today you would lose (14.00) from holding SPORTING or give up 13.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.44% |
| Values | Daily Returns |
SPORTING vs. International Game Technology
Performance |
| Timeline |
| SPORTING |
| International Game |
SPORTING and International Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORTING and International Game
The main advantage of trading using opposite SPORTING and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING 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.| SPORTING vs. GameStop Corp | SPORTING vs. CENTURIA OFFICE REIT | SPORTING vs. Tower One Wireless | SPORTING vs. PLAYMATES TOYS |
| International Game vs. AGRICULTBK HADR25 YC | International Game vs. Australian Agricultural | International Game vs. YATRA ONLINE DL 0001 | International Game vs. NorAm Drilling AS |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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