Correlation Between Sciplay Corp and GameSquare Holdings

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Can any of the company-specific risk be diversified away by investing in both Sciplay Corp and GameSquare Holdings 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 Sciplay Corp and GameSquare Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sciplay Corp and GameSquare Holdings, you can compare the effects of market volatilities on Sciplay Corp and GameSquare Holdings 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 Sciplay Corp with a short position of GameSquare Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sciplay Corp and GameSquare Holdings.

Diversification Opportunities for Sciplay Corp and GameSquare Holdings

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between Sciplay and GameSquare is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sciplay Corp and GameSquare Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameSquare Holdings and Sciplay Corp 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 Sciplay Corp are associated (or correlated) with GameSquare Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameSquare Holdings has no effect on the direction of Sciplay Corp i.e., Sciplay Corp and GameSquare Holdings go up and down completely randomly.

Pair Corralation between Sciplay Corp and GameSquare Holdings

If you would invest  91.00  in GameSquare Holdings on September 6, 2024 and sell it today you would lose (3.00) from holding GameSquare Holdings or give up 3.3% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy1.56%
ValuesDaily Returns

Sciplay Corp  vs.  GameSquare Holdings

 Performance 
       Timeline  
Sciplay Corp 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Sciplay Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Sciplay Corp is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.
GameSquare Holdings 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in GameSquare Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain primary indicators, GameSquare Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sciplay Corp and GameSquare Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sciplay Corp and GameSquare Holdings

The main advantage of trading using opposite Sciplay Corp and GameSquare Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sciplay Corp position performs unexpectedly, GameSquare Holdings 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 GameSquare Holdings will offset losses from the drop in GameSquare Holdings' long position.
The idea behind Sciplay Corp and GameSquare Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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