Correlation Between International Game and Lottery, Warrants

Can any of the company-specific risk be diversified away by investing in both International Game and Lottery, Warrants 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 Lottery, Warrants 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 Lottery, Warrants, you can compare the effects of market volatilities on International Game and Lottery, Warrants 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 Lottery, Warrants. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Lottery, Warrants.

Diversification Opportunities for International Game and Lottery, Warrants

0.56

Correlation Coefficient

International Game  Lottery, Warrants

Very weak diversification

The 3 months correlation between International and Lottery, is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Lottery, Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lottery, Warrants 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 Lottery, Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lottery, Warrants has no effect on the direction of International Game i.e., International Game and Lottery, Warrants go up and down completely randomly.

Pair Corralation between International Game and Lottery, Warrants

Considering the 90-day investment horizon International Game Technology is expected to under-perform the Lottery, Warrants. But the stock apears to be less risky and, when comparing its historical volatility, International Game Technology is 7.22 times less risky than Lottery, Warrants. The stock trades about -0.18 of its potential returns per unit of risk. The Lottery, Warrants is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1.31  in Lottery, Warrants on September 25, 2024 and sell it today you would lose (0.43) from holding Lottery, Warrants or give up 32.82% of portfolio value over 90 days.

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

International Game Technology  vs.  Lottery, Warrants

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.

Lottery, Warrants

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lottery, Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Lottery, Warrants is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with International Game and Lottery, Warrants

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

The idea behind International Game Technology and Lottery, Warrants 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.