Correlation Between Lottery, Common and DraftKings

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

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

Diversification Opportunities for Lottery, Common and DraftKings

-0.44

Correlation Coefficient

Lottery, Common  DraftKings

Very good diversification

The 3 months correlation between Lottery, and DraftKings is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lottery, Common Stock and DraftKings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DraftKings and Lottery, Common 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 Lottery, Common Stock are associated (or correlated) with DraftKings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DraftKings has no effect on the direction of Lottery, Common i.e., Lottery, Common and DraftKings go up and down completely randomly.

Pair Corralation between Lottery, Common and DraftKings

Given the investment horizon of 90 days Lottery, Common Stock is expected to under-perform the DraftKings. In addition to that, Lottery, Common is 2.98 times more volatile than DraftKings. It trades about -0.12 of its total potential returns per unit of risk. DraftKings is currently generating about -0.09 per unit of volatility. If you would invest  4,235  in DraftKings on September 19, 2024 and sell it today you would lose (163.00) from holding DraftKings or give up 3.85% of portfolio value over 90 days.

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

Lottery, Common Stock  vs.  DraftKings

Lottery, Common Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lottery, Common Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

DraftKings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DraftKings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, DraftKings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Lottery, Common and DraftKings

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

The idea behind Lottery, Common Stock and DraftKings 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.