Correlation Between Flanigans Enterprises and International Game

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

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

Diversification Opportunities for Flanigans Enterprises and International Game

0.55

Correlation Coefficient

Flanigans Enterprises  International Game

Very weak diversification

The 3 months correlation between Flanigans and International is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and Flanigans Enterprises 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 Flanigans Enterprises 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 Flanigans Enterprises i.e., Flanigans Enterprises and International Game go up and down completely randomly.

Pair Corralation between Flanigans Enterprises and International Game

Considering the 90-day investment horizon Flanigans Enterprises is expected to generate 1.28 times more return on investment than International Game. However, Flanigans Enterprises is 1.28 times more volatile than International Game Technology. It trades about -0.04 of its potential returns per unit of risk. International Game Technology is currently generating about -0.12 per unit of risk. If you would invest  2,591  in Flanigans Enterprises on September 13, 2024 and sell it today you would lose (125.00) from holding Flanigans Enterprises or give up 4.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	87.3%
Values	Daily Returns

Flanigans Enterprises  vs.  International Game Technology

Flanigans Enterprises

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Flanigans Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Flanigans Enterprises is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

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. In spite of latest conflicting performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Flanigans Enterprises and International Game

The main advantage of trading using opposite Flanigans Enterprises and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises 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 Flanigans Enterprises 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.