Correlation Between Scientific Games and US Physical
Can any of the company-specific risk be diversified away by investing in both Scientific Games and US Physical 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 US Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Games and US Physical Therapy, you can compare the effects of market volatilities on Scientific Games and US Physical 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 US Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and US Physical.
Diversification Opportunities for Scientific Games and US Physical
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Scientific and UPH is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games and US Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Physical Therapy 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 US Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Physical Therapy has no effect on the direction of Scientific Games i.e., Scientific Games and US Physical go up and down completely randomly.
Pair Corralation between Scientific Games and US Physical
Assuming the 90 days horizon Scientific Games is expected to generate 0.88 times more return on investment than US Physical. However, Scientific Games is 1.13 times less risky than US Physical. It trades about 0.38 of its potential returns per unit of risk. US Physical Therapy is currently generating about -0.14 per unit of risk. If you would invest 8,100 in Scientific Games on October 23, 2024 and sell it today you would earn a total of 550.00 from holding Scientific Games or generate 6.79% 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. US Physical Therapy
Performance |
| Timeline |
| Scientific Games |
| US Physical Therapy |
Scientific Games and US Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientific Games and US Physical
The main advantage of trading using opposite Scientific Games and US Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games position performs unexpectedly, US Physical 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 US Physical will offset losses from the drop in US Physical's long position.| Scientific Games vs. United Rentals | Scientific Games vs. GameStop Corp | Scientific Games vs. QINGCI GAMES INC | Scientific Games vs. Sixt Leasing SE |
| US Physical vs. Scientific Games | US Physical vs. Gaming and Leisure | US Physical vs. Transport International Holdings | US Physical vs. FRACTAL GAMING GROUP |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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