Correlation Between TROPHY GAMES and International Game

Can any of the company-specific risk be diversified away by investing in both TROPHY GAMES 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 TROPHY GAMES and International Game into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TROPHY GAMES DEV and International Game Technology, you can compare the effects of market volatilities on TROPHY GAMES 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 TROPHY GAMES with a short position of International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of TROPHY GAMES and International Game.

Diversification Opportunities for TROPHY GAMES and International Game

0.46

Correlation Coefficient

TROPHY GAMES  International Game

Very weak diversification

The 3 months correlation between TROPHY and International is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding TROPHY GAMES DEV and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and TROPHY GAMES 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 TROPHY GAMES DEV 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 TROPHY GAMES i.e., TROPHY GAMES and International Game go up and down completely randomly.

Pair Corralation between TROPHY GAMES and International Game

Assuming the 90 days horizon TROPHY GAMES DEV is expected to generate 1.3 times more return on investment than International Game. However, TROPHY GAMES is 1.3 times more volatile than International Game Technology. It trades about -0.02 of its potential returns per unit of risk. International Game Technology is currently generating about -0.04 per unit of risk. If you would invest  96.00  in TROPHY GAMES DEV on September 4, 2024 and sell it today you would lose (5.00) from holding TROPHY GAMES DEV or give up 5.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

TROPHY GAMES DEV  vs.  International Game Technology

TROPHY GAMES DEV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TROPHY GAMES DEV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TROPHY GAMES is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

International Game

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, International Game is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TROPHY GAMES and International Game

The main advantage of trading using opposite TROPHY GAMES and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TROPHY GAMES 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.

The idea behind TROPHY GAMES DEV and International Game Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.