Correlation Between Da Cin and International Games

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Can any of the company-specific risk be diversified away by investing in both Da Cin and International Games 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 Da Cin and International Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Da Cin Construction Co and International Games System, you can compare the effects of market volatilities on Da Cin and International Games 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 Da Cin with a short position of International Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Da Cin and International Games.

Diversification Opportunities for Da Cin and International Games

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between 2535 and International is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Da Cin Construction Co and International Games System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Games and Da Cin 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 Da Cin Construction Co are associated (or correlated) with International Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Games has no effect on the direction of Da Cin i.e., Da Cin and International Games go up and down completely randomly.

Pair Corralation between Da Cin and International Games

Assuming the 90 days trading horizon Da Cin Construction Co is expected to generate 0.65 times more return on investment than International Games. However, Da Cin Construction Co is 1.54 times less risky than International Games. It trades about 0.25 of its potential returns per unit of risk. International Games System is currently generating about 0.1 per unit of risk. If you would invest  4,910  in Da Cin Construction Co on September 20, 2024 and sell it today you would earn a total of  370.00  from holding Da Cin Construction Co or generate 7.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Da Cin Construction Co  vs.  International Games System

 Performance 
       Timeline  
Da Cin Construction 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Da Cin Construction Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Da Cin is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
International Games 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in International Games System are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, International Games showed solid returns over the last few months and may actually be approaching a breakup point.

Da Cin and International Games Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Da Cin and International Games

The main advantage of trading using opposite Da Cin and International Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Da Cin position performs unexpectedly, International Games 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 Games will offset losses from the drop in International Games' long position.
The idea behind Da Cin Construction Co and International Games System 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.
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 CEOs Directory module to screen CEOs from public companies around the world.

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