Correlation Between WINSON Machinery and International Games

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

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

Diversification Opportunities for WINSON Machinery and International Games

0.17

Correlation Coefficient

WINSON Machinery  International Games

Average diversification

The 3 months correlation between WINSON and International is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding WINSON Machinery 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 WINSON Machinery 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 WINSON Machinery 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 WINSON Machinery i.e., WINSON Machinery and International Games go up and down completely randomly.

Pair Corralation between WINSON Machinery and International Games

Assuming the 90 days trading horizon WINSON Machinery is expected to generate 10.32 times less return on investment than International Games. But when comparing it to its historical volatility, WINSON Machinery Co is 5.66 times less risky than International Games. It trades about 0.03 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  21,652  in International Games System on October 2, 2024 and sell it today you would earn a total of  75,748  from holding International Games System or generate 349.84% return on investment over 90 days.

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

WINSON Machinery Co  vs.  International Games System

WINSON Machinery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WINSON Machinery Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

International Games

Risk-Adjusted Performance

0 of 100

Very 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 WINSON Machinery and International Games

The main advantage of trading using opposite WINSON Machinery and International Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WINSON Machinery 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 WINSON Machinery 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.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.