Correlation Between Gaming and Impala Platinum

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

Diversification Opportunities for Gaming and Impala Platinum

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between Gaming and Impala is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gaming and Leisure and Impala Platinum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impala Platinum Holdings and Gaming 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 Gaming and Leisure are associated (or correlated) with Impala Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impala Platinum Holdings has no effect on the direction of Gaming i.e., Gaming and Impala Platinum go up and down completely randomly.

Pair Corralation between Gaming and Impala Platinum

Assuming the 90 days horizon Gaming is expected to generate 2.42 times less return on investment than Impala Platinum. But when comparing it to its historical volatility, Gaming and Leisure is 3.72 times less risky than Impala Platinum. It trades about 0.06 of its potential returns per unit of risk. Impala Platinum Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  396.00  in Impala Platinum Holdings on October 8, 2024 and sell it today you would earn a total of  85.00  from holding Impala Platinum Holdings or generate 21.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Gaming and Leisure  vs.  Impala Platinum Holdings

 Performance 
       Timeline  
Gaming and Leisure 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Gaming and Leisure are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Gaming is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
Impala Platinum Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Impala Platinum Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Gaming and Impala Platinum Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gaming and Impala Platinum

The main advantage of trading using opposite Gaming and Impala Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming position performs unexpectedly, Impala Platinum 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 Impala Platinum will offset losses from the drop in Impala Platinum's long position.
The idea behind Gaming and Leisure and Impala Platinum Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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