Correlation Between Scientific Games and Mastercard
Can any of the company-specific risk be diversified away by investing in both Scientific Games and Mastercard 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 Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Games and Mastercard, you can compare the effects of market volatilities on Scientific Games and Mastercard 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 Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and Mastercard.
Diversification Opportunities for Scientific Games and Mastercard
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Scientific and Mastercard is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard 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 Mastercard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastercard has no effect on the direction of Scientific Games i.e., Scientific Games and Mastercard go up and down completely randomly.
Pair Corralation between Scientific Games and Mastercard
Assuming the 90 days horizon Scientific Games is expected to generate 2.27 times less return on investment than Mastercard. In addition to that, Scientific Games is 1.88 times more volatile than Mastercard. It trades about 0.03 of its total potential returns per unit of risk. Mastercard is currently generating about 0.14 per unit of volatility. If you would invest 46,635 in Mastercard on September 13, 2024 and sell it today you would earn a total of 3,695 from holding Mastercard or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scientific Games vs. Mastercard
Performance |
| Timeline |
| Scientific Games |
| Mastercard |
Scientific Games and Mastercard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientific Games and Mastercard
The main advantage of trading using opposite Scientific Games and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games position performs unexpectedly, Mastercard 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 Mastercard will offset losses from the drop in Mastercard's long position.| Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc |
| Mastercard vs. SPORT LISBOA E | Mastercard vs. Sportsmans Warehouse Holdings | Mastercard vs. Gaztransport Technigaz SA | Mastercard vs. Scientific Games |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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