Correlation Between Esports Entertainment and International Game

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

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

Diversification Opportunities for Esports Entertainment and International Game

0.81

Correlation Coefficient

Esports Entertainment  International Game

Very poor diversification

The 3 months correlation between Esports and International is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Esports Entertainment Group and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and Esports Entertainment 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 Esports Entertainment Group 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 Esports Entertainment i.e., Esports Entertainment and International Game go up and down completely randomly.

Pair Corralation between Esports Entertainment and International Game

If you would invest  54.00  in Esports Entertainment Group on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Esports Entertainment Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.56%
Values	Daily Returns

Esports Entertainment Group  vs.  International Game Technology

Esports Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Esports Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Esports Entertainment is not utilizing all of its potentials. The current 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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Esports Entertainment and International Game

The main advantage of trading using opposite Esports Entertainment and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esports Entertainment 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 Esports Entertainment Group 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.