Correlation Between Scientific Games and China Resources
Can any of the company-specific risk be diversified away by investing in both Scientific Games and China Resources 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 China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Games and China Resources Gas, you can compare the effects of market volatilities on Scientific Games and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and China Resources.
Diversification Opportunities for Scientific Games and China Resources
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scientific and China is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games and China Resources Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Gas 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Gas has no effect on the direction of Scientific Games i.e., Scientific Games and China Resources go up and down completely randomly.
Pair Corralation between Scientific Games and China Resources
Assuming the 90 days horizon Scientific Games is expected to generate 2.1 times less return on investment than China Resources. But when comparing it to its historical volatility, Scientific Games is 1.64 times less risky than China Resources. It trades about 0.05 of its potential returns per unit of risk. China Resources Gas is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 164.00 in China Resources Gas on October 11, 2024 and sell it today you would earn a total of 180.00 from holding China Resources Gas or generate 109.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scientific Games vs. China Resources Gas
Performance |
| Timeline |
| Scientific Games |
| China Resources Gas |
Scientific Games and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientific Games and China Resources
The main advantage of trading using opposite Scientific Games and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Scientific Games vs. ELMOS SEMICONDUCTOR | Scientific Games vs. BE Semiconductor Industries | Scientific Games vs. Solstad Offshore ASA | Scientific Games vs. NXP Semiconductors NV |
| China Resources vs. American Eagle Outfitters | China Resources vs. SOGECLAIR SA INH | China Resources vs. MOLSON RS BEVERAGE | China Resources vs. Austevoll Seafood ASA |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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