Correlation Between International Game and La Franaise

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

By analyzing existing cross correlation between International Game Technology and La Franaise des, you can compare the effects of market volatilities on International Game and La Franaise 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 International Game with a short position of La Franaise. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and La Franaise.

Diversification Opportunities for International Game and La Franaise

0.41

Correlation Coefficient

International Game  La Franaise

Very weak diversification

The 3 months correlation between International and 1WE is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and La Franaise des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Franaise des and International Game 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 International Game Technology are associated (or correlated) with La Franaise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Franaise des has no effect on the direction of International Game i.e., International Game and La Franaise go up and down completely randomly.

Pair Corralation between International Game and La Franaise

Assuming the 90 days horizon International Game Technology is expected to under-perform the La Franaise. In addition to that, International Game is 2.28 times more volatile than La Franaise des. It trades about -0.28 of its total potential returns per unit of risk. La Franaise des is currently generating about -0.08 per unit of volatility. If you would invest  3,734  in La Franaise des on October 10, 2024 and sell it today you would lose (54.00) from holding La Franaise des or give up 1.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

International Game Technology  vs.  La Franaise des

International Game

Risk-Adjusted Performance

0 of 100

Very Weak

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

La Franaise des

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in La Franaise des are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, La Franaise is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with International Game and La Franaise

The main advantage of trading using opposite International Game and La Franaise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, La Franaise 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 La Franaise will offset losses from the drop in La Franaise's long position.

The idea behind International Game Technology and La Franaise des 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.