Correlation Between Gambling and Accel Entertainment

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

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

Diversification Opportunities for Gambling and Accel Entertainment

0.86

Correlation Coefficient

Gambling  Accel Entertainment

Very poor diversification

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

Pair Corralation between Gambling and Accel Entertainment

Given the investment horizon of 90 days Gambling Group is expected to generate 1.53 times more return on investment than Accel Entertainment. However, Gambling is 1.53 times more volatile than Accel Entertainment. It trades about -0.02 of its potential returns per unit of risk. Accel Entertainment is currently generating about -0.04 per unit of risk. 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

Gambling Group  vs.  Accel Entertainment

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.

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.

Pair Trading with Gambling and Accel Entertainment

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

The idea behind Gambling Group and Accel 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.