Correlation Between PlayAGS and International Game

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

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

Diversification Opportunities for PlayAGS and International Game

-0.79

Correlation Coefficient

PlayAGS  International Game

Pay attention - limited upside

The 3 months correlation between PlayAGS and International is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding PlayAGS and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and PlayAGS 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 PlayAGS are associated (or correlated) with International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of PlayAGS i.e., PlayAGS and International Game go up and down completely randomly.

Pair Corralation between PlayAGS and International Game

Considering the 90-day investment horizon PlayAGS is expected to generate 0.16 times more return on investment than International Game. However, PlayAGS is 6.1 times less risky than International Game. It trades about 0.2 of its potential returns per unit of risk. International Game Technology is currently generating about -0.15 per unit of risk. If you would invest  1,130  in PlayAGS on August 28, 2024 and sell it today you would earn a total of  33.00  from holding PlayAGS or generate 2.92% return on investment over 90 days.

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

PlayAGS  vs.  International Game Technology

PlayAGS

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PlayAGS are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, PlayAGS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

International Game

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with PlayAGS and International Game

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

The idea behind PlayAGS and International Game Technology 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.