Correlation Between 888 Holdings and Inspired Entertainment

Can any of the company-specific risk be diversified away by investing in both 888 Holdings and Inspired Entertainment 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 888 Holdings and Inspired Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 888 Holdings and Inspired Entertainment, you can compare the effects of market volatilities on 888 Holdings and Inspired Entertainment 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 888 Holdings with a short position of Inspired Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of 888 Holdings and Inspired Entertainment.

Diversification Opportunities for 888 Holdings and Inspired Entertainment

-0.04

Correlation Coefficient

888 Holdings  Inspired Entertainment

Good diversification

The 3 months correlation between 888 and Inspired is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding 888 Holdings and Inspired Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspired Entertainment and 888 Holdings 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 888 Holdings are associated (or correlated) with Inspired Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspired Entertainment has no effect on the direction of 888 Holdings i.e., 888 Holdings and Inspired Entertainment go up and down completely randomly.

Pair Corralation between 888 Holdings and Inspired Entertainment

Assuming the 90 days horizon 888 Holdings is expected to generate 1.36 times more return on investment than Inspired Entertainment. However, 888 Holdings is 1.36 times more volatile than Inspired Entertainment. It trades about 0.01 of its potential returns per unit of risk. Inspired Entertainment is currently generating about -0.01 per unit of risk. If you would invest  102.00  in 888 Holdings on September 21, 2024 and sell it today you would lose (23.00) from holding 888 Holdings or give up 22.55% of portfolio value over 90 days.

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

888 Holdings  vs.  Inspired Entertainment

888 Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 888 Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, 888 Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Inspired Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inspired Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with 888 Holdings and Inspired Entertainment

The main advantage of trading using opposite 888 Holdings and Inspired Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 888 Holdings position performs unexpectedly, Inspired Entertainment 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 Inspired Entertainment will offset losses from the drop in Inspired Entertainment's long position.

The idea behind 888 Holdings and Inspired Entertainment 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.