Correlation Between GameStop Corp and International Game
Can any of the company-specific risk be diversified away by investing in both GameStop Corp 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 GameStop Corp and International Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and International Game Technology, you can compare the effects of market volatilities on GameStop Corp 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 GameStop Corp with a short position of International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and International Game.
Diversification Opportunities for GameStop Corp and International Game
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GameStop and International is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and GameStop Corp 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 GameStop Corp 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 GameStop Corp i.e., GameStop Corp and International Game go up and down completely randomly.
Pair Corralation between GameStop Corp and International Game
Considering the 90-day investment horizon GameStop Corp is expected to under-perform the International Game. In addition to that, GameStop Corp is 1.69 times more volatile than International Game Technology. It trades about -0.02 of its total potential returns per unit of risk. International Game Technology is currently generating about 0.01 per unit of volatility. If you would invest 2,101 in International Game Technology on January 20, 2024 and sell it today you would lose (81.00) from holding International Game Technology or give up 3.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GameStop Corp vs. International Game Technology
Performance |
| Timeline |
| GameStop Corp |
| International Game |
GameStop Corp and International Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameStop Corp and International Game
The main advantage of trading using opposite GameStop Corp and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp 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.| GameStop Corp vs. Target | GameStop Corp vs. Lowes Companies | GameStop Corp vs. Kohls Corp | GameStop Corp vs. Gap Inc |
| International Game vs. NeogamesSA | International Game vs. Accel Entertainment | International Game vs. PlayAGS | International Game vs. Everi Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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