Correlation Between RELX PLC and Scientific Games
Can any of the company-specific risk be diversified away by investing in both RELX PLC 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 RELX PLC and Scientific Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RELX PLC and Scientific Games, you can compare the effects of market volatilities on RELX PLC 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 RELX PLC with a short position of Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of RELX PLC and Scientific Games.
Diversification Opportunities for RELX PLC and Scientific Games
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RELX and Scientific is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding RELX PLC and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games and RELX PLC 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 RELX PLC 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 RELX PLC i.e., RELX PLC and Scientific Games go up and down completely randomly.
Pair Corralation between RELX PLC and Scientific Games
Assuming the 90 days trading horizon RELX PLC is expected to generate 0.57 times more return on investment than Scientific Games. However, RELX PLC is 1.77 times less risky than Scientific Games. It trades about 0.1 of its potential returns per unit of risk. Scientific Games is currently generating about 0.04 per unit of risk. If you would invest 2,611 in RELX PLC on October 14, 2024 and sell it today you would earn a total of 1,935 from holding RELX PLC or generate 74.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RELX PLC vs. Scientific Games
Performance |
| Timeline |
| RELX PLC |
| Scientific Games |
RELX PLC and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RELX PLC and Scientific Games
The main advantage of trading using opposite RELX PLC and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RELX PLC 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.| RELX PLC vs. Scientific Games | RELX PLC vs. Hochschild Mining plc | RELX PLC vs. Wenzhou Kangning Hospital | RELX PLC vs. HEALTHSTREAM |
| Scientific Games vs. US Physical Therapy | Scientific Games vs. Canadian Utilities Limited | Scientific Games vs. NORTHEAST UTILITIES | Scientific Games vs. Acadia Healthcare |
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 CEOs Directory module to screen CEOs from public companies around the world.
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