Correlation Between Scientific Games and BROOKDALE
Can any of the company-specific risk be diversified away by investing in both Scientific Games and BROOKDALE 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 Scientific Games and BROOKDALE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Games and BROOKDALE SR LIVING, you can compare the effects of market volatilities on Scientific Games and BROOKDALE 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 Scientific Games with a short position of BROOKDALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and BROOKDALE.
Diversification Opportunities for Scientific Games and BROOKDALE
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scientific and BROOKDALE is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games and BROOKDALE SR LIVING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROOKDALE SR LIVING and Scientific Games 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 Scientific Games are associated (or correlated) with BROOKDALE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROOKDALE SR LIVING has no effect on the direction of Scientific Games i.e., Scientific Games and BROOKDALE go up and down completely randomly.
Pair Corralation between Scientific Games and BROOKDALE
Assuming the 90 days horizon Scientific Games is expected to generate 1.33 times less return on investment than BROOKDALE. But when comparing it to its historical volatility, Scientific Games is 1.63 times less risky than BROOKDALE. It trades about 0.07 of its potential returns per unit of risk. BROOKDALE SR LIVING is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 252.00 in BROOKDALE SR LIVING on December 4, 2024 and sell it today you would earn a total of 283.00 from holding BROOKDALE SR LIVING or generate 112.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Scientific Games vs. BROOKDALE SR LIVING
Performance |
| Timeline |
| Scientific Games |
| BROOKDALE SR LIVING |
Scientific Games and BROOKDALE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientific Games and BROOKDALE
The main advantage of trading using opposite Scientific Games and BROOKDALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games position performs unexpectedly, BROOKDALE 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 BROOKDALE will offset losses from the drop in BROOKDALE's long position.| Scientific Games vs. Calibre Mining Corp | Scientific Games vs. H2O Retailing | Scientific Games vs. Perseus Mining Limited | Scientific Games vs. PICKN PAY STORES |
| BROOKDALE vs. SPARTAN STORES | BROOKDALE vs. Ross Stores | BROOKDALE vs. BORR DRILLING NEW | BROOKDALE vs. National Retail Properties |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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