Correlation Between Scientific Games and Packagingof America
Can any of the company-specific risk be diversified away by investing in both Scientific Games and Packagingof America 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 Packagingof America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Games and Packaging of, you can compare the effects of market volatilities on Scientific Games and Packagingof America 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 Packagingof America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and Packagingof America.
Diversification Opportunities for Scientific Games and Packagingof America
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Scientific and Packagingof is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games and Packaging of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packagingof America 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 Packagingof America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packagingof America has no effect on the direction of Scientific Games i.e., Scientific Games and Packagingof America go up and down completely randomly.
Pair Corralation between Scientific Games and Packagingof America
Assuming the 90 days horizon Scientific Games is expected to generate 1.18 times less return on investment than Packagingof America. In addition to that, Scientific Games is 1.24 times more volatile than Packaging of. It trades about 0.24 of its total potential returns per unit of risk. Packaging of is currently generating about 0.35 per unit of volatility. If you would invest 21,735 in Packaging of on October 20, 2024 and sell it today you would earn a total of 1,275 from holding Packaging of or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scientific Games vs. Packaging of
Performance |
| Timeline |
| Scientific Games |
| Packagingof America |
Scientific Games and Packagingof America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientific Games and Packagingof America
The main advantage of trading using opposite Scientific Games and Packagingof America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games position performs unexpectedly, Packagingof America 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 Packagingof America will offset losses from the drop in Packagingof America's long position.| Scientific Games vs. Telecom Argentina SA | Scientific Games vs. UNIVERSAL MUSIC GROUP | Scientific Games vs. Chunghwa Telecom Co | Scientific Games vs. Taiwan Semiconductor Manufacturing |
| Packagingof America vs. Crown Holdings | Packagingof America vs. Smurfit Kappa Group | Packagingof America vs. Graphic Packaging Holding |
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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