Correlation Between Accel Entertainment and Gambling

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

By analyzing existing cross correlation between Accel Entertainment and Gambling Group, you can compare the effects of market volatilities on Accel Entertainment and Gambling 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 Accel Entertainment with a short position of Gambling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accel Entertainment and Gambling.

Diversification Opportunities for Accel Entertainment and Gambling

0.86

Correlation Coefficient

Accel Entertainment  Gambling

Very poor diversification

The 3 months correlation between Accel and Gambling is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Accel Entertainment and Gambling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gambling Group and Accel Entertainment 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 Accel Entertainment are associated (or correlated) with Gambling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gambling Group has no effect on the direction of Accel Entertainment i.e., Accel Entertainment and Gambling go up and down completely randomly.

Pair Corralation between Accel Entertainment and Gambling

Given the investment horizon of 90 days Accel Entertainment is expected to under-perform the Gambling. But the stock apears to be less risky and, when comparing its historical volatility, Accel Entertainment is 1.53 times less risky than Gambling. The stock trades about -0.04 of its potential returns per unit of risk. The Gambling Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,426  in Gambling Group on December 29, 2024 and sell it today you would lose (91.00) from holding Gambling Group or give up 6.38% of portfolio value over 90 days.

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

Accel Entertainment  vs.  Gambling Group

Accel Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Accel Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Accel Entertainment is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Gambling Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gambling Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Gambling is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Accel Entertainment and Gambling

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

The idea behind Accel Entertainment and Gambling Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.