Correlation Between Evolution and Scientific Games
Can any of the company-specific risk be diversified away by investing in both Evolution 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 Evolution and Scientific Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution AB and Scientific Games, you can compare the effects of market volatilities on Evolution 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 Evolution with a short position of Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution and Scientific Games.
Diversification Opportunities for Evolution and Scientific Games
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Evolution and Scientific is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Evolution AB and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games and Evolution 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 Evolution AB 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 Evolution i.e., Evolution and Scientific Games go up and down completely randomly.
Pair Corralation between Evolution and Scientific Games
Assuming the 90 days trading horizon Evolution AB is expected to under-perform the Scientific Games. But the stock apears to be less risky and, when comparing its historical volatility, Evolution AB is 1.17 times less risky than Scientific Games. The stock trades about -0.06 of its potential returns per unit of risk. The Scientific Games is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8,700 in Scientific Games on August 31, 2024 and sell it today you would earn a total of 400.00 from holding Scientific Games or generate 4.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.23% |
Values | Daily Returns |
Evolution AB vs. Scientific Games
Performance |
Timeline |
Evolution AB |
Scientific Games |
Evolution and Scientific Games Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Evolution and Scientific Games
The main advantage of trading using opposite Evolution and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution 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.Evolution vs. Churchill Downs Incorporated | Evolution vs. Scientific Games | Evolution vs. International Game Technology | Evolution vs. Superior Plus Corp |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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