Correlation Between Neinor Homes and Scientific Games
Can any of the company-specific risk be diversified away by investing in both Neinor Homes and Scientific Games 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 Neinor Homes and Scientific Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neinor Homes SA and Scientific Games, you can compare the effects of market volatilities on Neinor Homes and Scientific Games 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 Neinor Homes with a short position of Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neinor Homes and Scientific Games.
Diversification Opportunities for Neinor Homes and Scientific Games
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Neinor and Scientific is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Neinor Homes SA and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games and Neinor Homes 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 Neinor Homes SA are associated (or correlated) with Scientific Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientific Games has no effect on the direction of Neinor Homes i.e., Neinor Homes and Scientific Games go up and down completely randomly.
Pair Corralation between Neinor Homes and Scientific Games
Assuming the 90 days trading horizon Neinor Homes SA is expected to generate 0.63 times more return on investment than Scientific Games. However, Neinor Homes SA is 1.59 times less risky than Scientific Games. It trades about 0.13 of its potential returns per unit of risk. Scientific Games is currently generating about -0.03 per unit of risk. If you would invest 1,273 in Neinor Homes SA on September 21, 2024 and sell it today you would earn a total of 297.00 from holding Neinor Homes SA or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neinor Homes SA vs. Scientific Games
Performance |
| Timeline |
| Neinor Homes SA |
| Scientific Games |
Neinor Homes and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neinor Homes and Scientific Games
The main advantage of trading using opposite Neinor Homes and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neinor Homes position performs unexpectedly, Scientific Games 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 Scientific Games will offset losses from the drop in Scientific Games' long position.| Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc |
| Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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