Correlation Between Scientific Games and RELX PLC
Can any of the company-specific risk be diversified away by investing in both Scientific Games and RELX PLC 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 RELX PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Games and RELX PLC, you can compare the effects of market volatilities on Scientific Games and RELX PLC 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 RELX PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and RELX PLC.
Diversification Opportunities for Scientific Games and RELX PLC
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Scientific and RELX is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games and RELX PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RELX PLC 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 RELX PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RELX PLC has no effect on the direction of Scientific Games i.e., Scientific Games and RELX PLC go up and down completely randomly.
Pair Corralation between Scientific Games and RELX PLC
Assuming the 90 days horizon Scientific Games is expected to generate 7.74 times less return on investment than RELX PLC. In addition to that, Scientific Games is 1.73 times more volatile than RELX PLC. It trades about 0.01 of its total potential returns per unit of risk. RELX PLC is currently generating about 0.08 per unit of volatility. If you would invest 3,818 in RELX PLC on October 14, 2024 and sell it today you would earn a total of 728.00 from holding RELX PLC or generate 19.07% 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. RELX PLC
Performance |
| Timeline |
| Scientific Games |
| RELX PLC |
Scientific Games and RELX PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientific Games and RELX PLC
The main advantage of trading using opposite Scientific Games and RELX PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games position performs unexpectedly, RELX PLC 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 RELX PLC will offset losses from the drop in RELX PLC's long position.| Scientific Games vs. ALTAIR RES INC | Scientific Games vs. DELTA AIR LINES | Scientific Games vs. Corsair Gaming | Scientific Games vs. Fair Isaac Corp |
| RELX PLC vs. Scientific Games | RELX PLC vs. Hochschild Mining plc | RELX PLC vs. Wenzhou Kangning Hospital | RELX PLC vs. HEALTHSTREAM |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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