Correlation Between Scientific Games and Penn National
Can any of the company-specific risk be diversified away by investing in both Scientific Games and Penn National 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 Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Games and Penn National Gaming, you can compare the effects of market volatilities on Scientific Games and Penn National 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 Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and Penn National.
Diversification Opportunities for Scientific Games and Penn National
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Scientific and Penn is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games and Penn National Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penn National Gaming 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 Penn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penn National Gaming has no effect on the direction of Scientific Games i.e., Scientific Games and Penn National go up and down completely randomly.
Pair Corralation between Scientific Games and Penn National
Assuming the 90 days horizon Scientific Games is expected to generate 1.03 times more return on investment than Penn National. However, Scientific Games is 1.03 times more volatile than Penn National Gaming. It trades about 0.11 of its potential returns per unit of risk. Penn National Gaming is currently generating about 0.11 per unit of risk. If you would invest 8,550 in Scientific Games on September 1, 2024 and sell it today you would earn a total of 550.00 from holding Scientific Games or generate 6.43% 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. Penn National Gaming
Performance |
| Timeline |
| Scientific Games |
| Penn National Gaming |
Scientific Games and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientific Games and Penn National
The main advantage of trading using opposite Scientific Games and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games position performs unexpectedly, Penn National 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 Penn National will offset losses from the drop in Penn National's long position.| Scientific Games vs. InterContinental Hotels Group | Scientific Games vs. Marie Brizard Wine | Scientific Games vs. Hyatt Hotels | Scientific Games vs. HYATT HOTELS A |
| Penn National vs. WESTLAKE CHEMICAL | Penn National vs. Marie Brizard Wine | Penn National vs. NorAm Drilling AS | Penn National vs. SEKISUI CHEMICAL |
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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