Correlation Between Inspired Entertainment and Gan

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

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

Diversification Opportunities for Inspired Entertainment and Gan

-0.31

Correlation Coefficient

Inspired Entertainment  Gan

Very good diversification

The 3 months correlation between Inspired and Gan is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Inspired Entertainment and Gan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan and Inspired 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 Inspired Entertainment are associated (or correlated) with Gan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan has no effect on the direction of Inspired Entertainment i.e., Inspired Entertainment and Gan go up and down completely randomly.

Pair Corralation between Inspired Entertainment and Gan

Given the investment horizon of 90 days Inspired Entertainment is expected to generate 2.54 times more return on investment than Gan. However, Inspired Entertainment is 2.54 times more volatile than Gan. It trades about 0.02 of its potential returns per unit of risk. Gan is currently generating about -0.03 per unit of risk. If you would invest  885.00  in Inspired Entertainment on December 28, 2024 and sell it today you would earn a total of  1.00  from holding Inspired Entertainment or generate 0.11% return on investment over 90 days.

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

Inspired Entertainment  vs.  Gan

Inspired Entertainment

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Inspired Entertainment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Inspired Entertainment is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Gan

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Gan is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Inspired Entertainment and Gan

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

The idea behind Inspired Entertainment and Gan 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.