Correlation Between International Game and Empire Global

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

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

Diversification Opportunities for International Game and Empire Global

0.62

Correlation Coefficient

International Game  Empire Global

Poor diversification

The 3 months correlation between International and Empire is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Empire Global Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire Global Gaming and International Game 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 International Game Technology are associated (or correlated) with Empire Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire Global Gaming has no effect on the direction of International Game i.e., International Game and Empire Global go up and down completely randomly.

Pair Corralation between International Game and Empire Global

Considering the 90-day investment horizon International Game Technology is expected to generate 0.1 times more return on investment than Empire Global. However, International Game Technology is 10.24 times less risky than Empire Global. It trades about -0.12 of its potential returns per unit of risk. Empire Global Gaming is currently generating about -0.18 per unit of risk. If you would invest  2,145  in International Game Technology on September 13, 2024 and sell it today you would lose (235.00) from holding International Game Technology or give up 10.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

International Game Technology  vs.  Empire Global Gaming

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.

Empire Global Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Empire Global Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with International Game and Empire Global

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

The idea behind International Game Technology and Empire Global Gaming 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.