Correlation Between Scientific Games and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Scientific Games and Geely Automobile 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 Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Games and Geely Automobile Holdings, you can compare the effects of market volatilities on Scientific Games and Geely Automobile 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 Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and Geely Automobile.
Diversification Opportunities for Scientific Games and Geely Automobile
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scientific and Geely is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games and Geely Automobile Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geely Automobile Holdings 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 Geely Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geely Automobile Holdings has no effect on the direction of Scientific Games i.e., Scientific Games and Geely Automobile go up and down completely randomly.
Pair Corralation between Scientific Games and Geely Automobile
Assuming the 90 days horizon Scientific Games is expected to generate 0.86 times more return on investment than Geely Automobile. However, Scientific Games is 1.16 times less risky than Geely Automobile. It trades about 0.11 of its potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.01 per unit of risk. If you would invest 8,200 in Scientific Games on November 5, 2024 and sell it today you would earn a total of 250.00 from holding Scientific Games or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scientific Games vs. Geely Automobile Holdings
Performance |
| Timeline |
| Scientific Games |
| Geely Automobile Holdings |
Scientific Games and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientific Games and Geely Automobile
The main advantage of trading using opposite Scientific Games and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games position performs unexpectedly, Geely Automobile 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 Geely Automobile will offset losses from the drop in Geely Automobile's long position.| Scientific Games vs. Summit Hotel Properties | Scientific Games vs. CAIRN HOMES EO | Scientific Games vs. Haverty Furniture Companies | Scientific Games vs. CENTURIA OFFICE REIT |
| Geely Automobile vs. Yanzhou Coal Mining | Geely Automobile vs. Monument Mining Limited | Geely Automobile vs. Lifeway Foods | Geely Automobile vs. PLANT VEDA FOODS |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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