Correlation Between MGP Ingredients and Scientific Games
Can any of the company-specific risk be diversified away by investing in both MGP Ingredients 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 MGP Ingredients and Scientific Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGP Ingredients and Scientific Games, you can compare the effects of market volatilities on MGP Ingredients 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 MGP Ingredients with a short position of Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGP Ingredients and Scientific Games.
Diversification Opportunities for MGP Ingredients and Scientific Games
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between MGP and Scientific is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding MGP Ingredients and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games and MGP Ingredients 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 MGP Ingredients 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 MGP Ingredients i.e., MGP Ingredients and Scientific Games go up and down completely randomly.
Pair Corralation between MGP Ingredients and Scientific Games
Assuming the 90 days trading horizon MGP Ingredients is expected to under-perform the Scientific Games. In addition to that, MGP Ingredients is 1.36 times more volatile than Scientific Games. It trades about -0.06 of its total potential returns per unit of risk. Scientific Games is currently generating about 0.03 per unit of volatility. If you would invest 7,850 in Scientific Games on September 14, 2024 and sell it today you would earn a total of 900.00 from holding Scientific Games or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGP Ingredients vs. Scientific Games
Performance |
| Timeline |
| MGP Ingredients |
| Scientific Games |
MGP Ingredients and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGP Ingredients and Scientific Games
The main advantage of trading using opposite MGP Ingredients and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGP Ingredients 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.| MGP Ingredients vs. Scientific Games | MGP Ingredients vs. GREENX METALS LTD | MGP Ingredients vs. Aluminum of | MGP Ingredients vs. EAST SIDE GAMES |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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