Correlation Between WinMate Communication and International Games

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

By analyzing existing cross correlation between WinMate Communication INC and International Games System, you can compare the effects of market volatilities on WinMate Communication 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 WinMate Communication with a short position of International Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinMate Communication and International Games.

Diversification Opportunities for WinMate Communication and International Games

-0.62

Correlation Coefficient

WinMate Communication  International Games

Excellent diversification

The 3 months correlation between WinMate and International is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding WinMate Communication INC and International Games System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Games and WinMate Communication 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 WinMate Communication INC 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 WinMate Communication i.e., WinMate Communication and International Games go up and down completely randomly.

Pair Corralation between WinMate Communication and International Games

Assuming the 90 days trading horizon WinMate Communication is expected to generate 26.56 times less return on investment than International Games. But when comparing it to its historical volatility, WinMate Communication INC is 33.85 times less risky than International Games. It trades about 0.08 of its potential returns per unit of risk. International Games System is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  20,977  in International Games System on October 4, 2024 and sell it today you would earn a total of  75,323  from holding International Games System or generate 359.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

WinMate Communication INC  vs.  International Games System

WinMate Communication INC

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WinMate Communication INC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, WinMate Communication showed solid returns over the last few months and may actually be approaching a breakup point.

International Games

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with WinMate Communication and International Games

The main advantage of trading using opposite WinMate Communication and International Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WinMate Communication 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 WinMate Communication INC 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.