Correlation Between Media and Scientific Games
Can any of the company-specific risk be diversified away by investing in both Media 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 Media and Scientific Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media and Games and Scientific Games, you can compare the effects of market volatilities on Media 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 Media with a short position of Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media and Scientific Games.
Diversification Opportunities for Media and Scientific Games
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Media and Scientific is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games and Media 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 Media and Games 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 Media i.e., Media and Scientific Games go up and down completely randomly.
Pair Corralation between Media and Scientific Games
Assuming the 90 days trading horizon Media and Games is expected to generate 1.14 times more return on investment than Scientific Games. However, Media is 1.14 times more volatile than Scientific Games. It trades about 0.16 of its potential returns per unit of risk. Scientific Games is currently generating about 0.04 per unit of risk. If you would invest 365.00 in Media and Games on August 29, 2024 and sell it today you would earn a total of 44.00 from holding Media and Games or generate 12.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media and Games vs. Scientific Games
Performance |
| Timeline |
| Media and Games |
| Scientific Games |
Media and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media and Scientific Games
The main advantage of trading using opposite Media and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media 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.| Media vs. Superior Plus Corp | Media vs. NMI Holdings | Media vs. Origin Agritech | Media vs. SIVERS SEMICONDUCTORS AB |
| 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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