Correlation Between SCIENCE IN and International Game

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

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

Diversification Opportunities for SCIENCE IN and International Game

0.25

Correlation Coefficient

SCIENCE IN  International Game

Modest diversification

The 3 months correlation between SCIENCE and International is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SCIENCE IN SPORT and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and SCIENCE IN 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 SCIENCE IN SPORT are associated (or correlated) with International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of SCIENCE IN i.e., SCIENCE IN and International Game go up and down completely randomly.

Pair Corralation between SCIENCE IN and International Game

Assuming the 90 days horizon SCIENCE IN SPORT is expected to generate 2.15 times more return on investment than International Game. However, SCIENCE IN is 2.15 times more volatile than International Game Technology. It trades about 0.01 of its potential returns per unit of risk. International Game Technology is currently generating about -0.1 per unit of risk. If you would invest  29.00  in SCIENCE IN SPORT on October 25, 2024 and sell it today you would lose (1.00) from holding SCIENCE IN SPORT or give up 3.45% of portfolio value over 90 days.

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

SCIENCE IN SPORT  vs.  International Game Technology

SCIENCE IN SPORT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCIENCE IN SPORT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SCIENCE IN is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 weak 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.

Pair Trading with SCIENCE IN and International Game

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

The idea behind SCIENCE IN SPORT and International Game Technology 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.