Correlation Between International Game and Everi Holdings
Can any of the company-specific risk be diversified away by investing in both International Game and Everi Holdings 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 International Game and Everi Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Game Technology and Everi Holdings, you can compare the effects of market volatilities on International Game and Everi Holdings 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 International Game with a short position of Everi Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Everi Holdings.
Diversification Opportunities for International Game and Everi Holdings
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between International and Everi is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Everi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everi Holdings and International Game 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 International Game Technology are associated (or correlated) with Everi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everi Holdings has no effect on the direction of International Game i.e., International Game and Everi Holdings go up and down completely randomly.
Pair Corralation between International Game and Everi Holdings
Considering the 90-day investment horizon International Game Technology is expected to generate 1.16 times more return on investment than Everi Holdings. However, International Game is 1.16 times more volatile than Everi Holdings. It trades about 0.02 of its potential returns per unit of risk. Everi Holdings is currently generating about -0.04 per unit of risk. If you would invest 1,934 in International Game Technology on January 26, 2024 and sell it today you would earn a total of 120.00 from holding International Game Technology or generate 6.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Game Technology vs. Everi Holdings
Performance |
| Timeline |
| International Game |
| Everi Holdings |
International Game and Everi Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Everi Holdings
The main advantage of trading using opposite International Game and Everi Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, Everi Holdings 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 Everi Holdings will offset losses from the drop in Everi Holdings' long position.| International Game vs. PlayAGS | International Game vs. Inspired Entertainment | International Game vs. Light Wonder |
Check out your portfolio center.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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