Correlation Between Gaming and DOW

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

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

Diversification Opportunities for Gaming and DOW

0.67
  Correlation Coefficient
Gaming And Leisure
DOW

Poor diversification

The 3 months correlation between Gaming and DOW is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Gaming And Leisure Properties and DOW in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on DOW and Gaming 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 Gaming And Leisure are associated (or correlated) with DOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOW has no effect on the direction of Gaming i.e. Gaming and DOW go up and down completely randomly.
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Pair Corralation between Gaming and DOW

Given the investment horizon of 30 days, Gaming And Leisure is expected to generate 2.11 times more return on investment than DOW. However, Gaming is 2.11 times more volatile than DOW. It trades about 0.14 of its potential returns per unit of risk. DOW is currently generating about 0.12 per unit of risk. If you would invest  2,556  in Gaming And Leisure on June 3, 2020 and sell it today you would earn a total of  923.00  from holding Gaming And Leisure or generate 36.11% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Gaming And Leisure Properties  vs.  DOW

 Performance (%) 
      Timeline 
 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Headlines Timeline module to stay connected to all market stories and filter out noise. drill down to analyze hype elasticity.


 
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