Correlation Between PlayAGS and Intema Solutions

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

By analyzing existing cross correlation between PlayAGS and Intema Solutions, you can compare the effects of market volatilities on PlayAGS and Intema Solutions 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 PlayAGS with a short position of Intema Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of PlayAGS and Intema Solutions.

Diversification Opportunities for PlayAGS and Intema Solutions

0.0

Correlation Coefficient

PlayAGS  Intema Solutions

Pay attention - limited upside

The 3 months correlation between PlayAGS and Intema is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PlayAGS and Intema Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intema Solutions and PlayAGS 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 PlayAGS are associated (or correlated) with Intema Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intema Solutions has no effect on the direction of PlayAGS i.e., PlayAGS and Intema Solutions go up and down completely randomly.

Pair Corralation between PlayAGS and Intema Solutions

Considering the 90-day investment horizon PlayAGS is expected to generate 9.87 times less return on investment than Intema Solutions. But when comparing it to its historical volatility, PlayAGS is 13.02 times less risky than Intema Solutions. It trades about 0.07 of its potential returns per unit of risk. Intema Solutions is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  5.95  in Intema Solutions on September 4, 2024 and sell it today you would lose (5.73) from holding Intema Solutions or give up 96.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PlayAGS  vs.  Intema Solutions

PlayAGS

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PlayAGS are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, PlayAGS is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Intema Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PlayAGS and Intema Solutions

The main advantage of trading using opposite PlayAGS and Intema Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PlayAGS position performs unexpectedly, Intema Solutions 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 Intema Solutions will offset losses from the drop in Intema Solutions' long position.

The idea behind PlayAGS and Intema Solutions 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.