Correlation Between Scientific Games and ResMed
Can any of the company-specific risk be diversified away by investing in both Scientific Games and ResMed 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 ResMed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Games and ResMed Inc, you can compare the effects of market volatilities on Scientific Games and ResMed 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 ResMed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and ResMed.
Diversification Opportunities for Scientific Games and ResMed
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scientific and ResMed is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games and ResMed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ResMed Inc 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 ResMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ResMed Inc has no effect on the direction of Scientific Games i.e., Scientific Games and ResMed go up and down completely randomly.
Pair Corralation between Scientific Games and ResMed
Assuming the 90 days horizon Scientific Games is expected to generate 1.31 times more return on investment than ResMed. However, Scientific Games is 1.31 times more volatile than ResMed Inc. It trades about 0.27 of its potential returns per unit of risk. ResMed Inc is currently generating about -0.18 per unit of risk. If you would invest 8,150 in Scientific Games on November 27, 2024 and sell it today you would earn a total of 1,450 from holding Scientific Games or generate 17.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scientific Games vs. ResMed Inc
Performance |
| Timeline |
| Scientific Games |
| ResMed Inc |
Scientific Games and ResMed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientific Games and ResMed
The main advantage of trading using opposite Scientific Games and ResMed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games position performs unexpectedly, ResMed 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 ResMed will offset losses from the drop in ResMed's long position.| Scientific Games vs. Odyssean Investment Trust | Scientific Games vs. Data3 Limited | Scientific Games vs. Linedata Services SA | Scientific Games vs. Apollo Investment Corp |
| ResMed vs. LINMON MEDIA LTD | ResMed vs. Hellenic Telecommunications Organization | ResMed vs. GEELY AUTOMOBILE | ResMed vs. CNVISION MEDIA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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