Correlation Between KINGBOARD CHEMICAL and Scientific Games
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL and Scientific Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and Scientific Games, you can compare the effects of market volatilities on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL with a short position of Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and Scientific Games.
Diversification Opportunities for KINGBOARD CHEMICAL and Scientific Games
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KINGBOARD and Scientific is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and Scientific Games go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and Scientific Games
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 1.6 times more return on investment than Scientific Games. However, KINGBOARD CHEMICAL is 1.6 times more volatile than Scientific Games. It trades about 0.23 of its potential returns per unit of risk. Scientific Games is currently generating about -0.22 per unit of risk. If you would invest 224.00 in KINGBOARD CHEMICAL on October 16, 2024 and sell it today you would earn a total of 18.00 from holding KINGBOARD CHEMICAL or generate 8.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. Scientific Games
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| Scientific Games |
KINGBOARD CHEMICAL and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and Scientific Games
The main advantage of trading using opposite KINGBOARD CHEMICAL and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL 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.| KINGBOARD CHEMICAL vs. IMPERIAL TOBACCO | KINGBOARD CHEMICAL vs. CAIRN HOMES EO | KINGBOARD CHEMICAL vs. CarsalesCom | KINGBOARD CHEMICAL vs. OFFICE DEPOT |
| Scientific Games vs. FAST RETAIL ADR | Scientific Games vs. Insurance Australia Group | Scientific Games vs. HANOVER INSURANCE | Scientific Games vs. Japan Post Insurance |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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