Correlation Between Scientific Games and Neoen SA
Can any of the company-specific risk be diversified away by investing in both Scientific Games and Neoen SA 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 Neoen SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Games and Neoen SA, you can compare the effects of market volatilities on Scientific Games and Neoen SA 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 Neoen SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and Neoen SA.
Diversification Opportunities for Scientific Games and Neoen SA
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scientific and Neoen is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games and Neoen SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neoen SA 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 Neoen SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neoen SA has no effect on the direction of Scientific Games i.e., Scientific Games and Neoen SA go up and down completely randomly.
Pair Corralation between Scientific Games and Neoen SA
Assuming the 90 days horizon Scientific Games is expected to generate 1.12 times more return on investment than Neoen SA. However, Scientific Games is 1.12 times more volatile than Neoen SA. It trades about 0.04 of its potential returns per unit of risk. Neoen SA is currently generating about 0.02 per unit of risk. If you would invest 6,100 in Scientific Games on October 25, 2024 and sell it today you would earn a total of 2,450 from holding Scientific Games or generate 40.16% 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. Neoen SA
Performance |
| Timeline |
| Scientific Games |
| Neoen SA |
Scientific Games and Neoen SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientific Games and Neoen SA
The main advantage of trading using opposite Scientific Games and Neoen SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games position performs unexpectedly, Neoen SA 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 Neoen SA will offset losses from the drop in Neoen SA's long position.| Scientific Games vs. RCS MediaGroup SpA | Scientific Games vs. Mitsui Chemicals | Scientific Games vs. REMEDY ENTERTAINMENT OYJ | Scientific Games vs. CHEMICAL INDUSTRIES |
| Neoen SA vs. Gaming and Leisure | Neoen SA vs. Scientific Games | Neoen SA vs. PENN NATL GAMING | Neoen SA vs. BioNTech SE |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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