Correlation Between AVITA Medical and Scientific Games
Can any of the company-specific risk be diversified away by investing in both AVITA Medical 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 AVITA Medical and Scientific Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVITA Medical and Scientific Games, you can compare the effects of market volatilities on AVITA Medical 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 AVITA Medical with a short position of Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVITA Medical and Scientific Games.
Diversification Opportunities for AVITA Medical and Scientific Games
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AVITA and Scientific is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding AVITA Medical and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games and AVITA Medical 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 AVITA Medical 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 AVITA Medical i.e., AVITA Medical and Scientific Games go up and down completely randomly.
Pair Corralation between AVITA Medical and Scientific Games
Assuming the 90 days trading horizon AVITA Medical is expected to generate 8.56 times more return on investment than Scientific Games. However, AVITA Medical is 8.56 times more volatile than Scientific Games. It trades about 0.08 of its potential returns per unit of risk. Scientific Games is currently generating about -0.28 per unit of risk. If you would invest 242.00 in AVITA Medical on October 12, 2024 and sell it today you would earn a total of 14.00 from holding AVITA Medical or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVITA Medical vs. Scientific Games
Performance |
| Timeline |
| AVITA Medical |
| Scientific Games |
AVITA Medical and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVITA Medical and Scientific Games
The main advantage of trading using opposite AVITA Medical and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVITA Medical 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.| AVITA Medical vs. MELIA HOTELS | AVITA Medical vs. SK TELECOM TDADR | AVITA Medical vs. Playa Hotels Resorts | AVITA Medical vs. EMPEROR ENT HOTEL |
| Scientific Games vs. Highlight Communications AG | Scientific Games vs. Charter Communications | Scientific Games vs. SK TELECOM TDADR | Scientific Games vs. TOMBADOR IRON LTD |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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