Correlation Between Light Wonder and PlayAGS

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Can any of the company-specific risk be diversified away by investing in both Light Wonder and PlayAGS 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 Light Wonder and PlayAGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Light Wonder and PlayAGS, you can compare the effects of market volatilities on Light Wonder and PlayAGS 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 Light Wonder with a short position of PlayAGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Light Wonder and PlayAGS.

Diversification Opportunities for Light Wonder and PlayAGS

  Correlation Coefficient

Good diversification

The 3 months correlation between Light and PlayAGS is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Light Wonder and PlayAGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayAGS and Light Wonder 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 Light Wonder are associated (or correlated) with PlayAGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayAGS has no effect on the direction of Light Wonder i.e., Light Wonder and PlayAGS go up and down completely randomly.

Pair Corralation between Light Wonder and PlayAGS

Considering the 90-day investment horizon Light Wonder is expected to generate 3.96 times more return on investment than PlayAGS. However, Light Wonder is 3.96 times more volatile than PlayAGS. It trades about 0.14 of its potential returns per unit of risk. PlayAGS is currently generating about -0.02 per unit of risk. If you would invest  9,325  in Light Wonder on March 21, 2024 and sell it today you would earn a total of  529.00  from holding Light Wonder or generate 5.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
ValuesDaily Returns

Light Wonder  vs.  PlayAGS

Light Wonder 

Risk-Adjusted Performance

0 of 100

Very Weak
Over the last 90 days Light Wonder has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Risk-Adjusted Performance

8 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in PlayAGS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, PlayAGS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Light Wonder and PlayAGS Volatility Contrast

   Predicted Return Density   

Pair Trading with Light Wonder and PlayAGS

The main advantage of trading using opposite Light Wonder and PlayAGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Light Wonder position performs unexpectedly, PlayAGS 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 PlayAGS will offset losses from the drop in PlayAGS's long position.
The idea behind Light Wonder and PlayAGS 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 Stocks Directory module to find actively traded stocks across global markets.

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