Correlation Between Scientific Games and Airbus SE
Can any of the company-specific risk be diversified away by investing in both Scientific Games and Airbus SE 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 Airbus SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Games and Airbus SE, you can compare the effects of market volatilities on Scientific Games and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and Airbus SE.
Diversification Opportunities for Scientific Games and Airbus SE
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scientific and Airbus is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of Scientific Games i.e., Scientific Games and Airbus SE go up and down completely randomly.
Pair Corralation between Scientific Games and Airbus SE
Assuming the 90 days horizon Scientific Games is expected to generate 1.38 times more return on investment than Airbus SE. However, Scientific Games is 1.38 times more volatile than Airbus SE. It trades about 0.12 of its potential returns per unit of risk. Airbus SE is currently generating about 0.08 per unit of risk. If you would invest 8,100 in Scientific Games on December 23, 2024 and sell it today you would earn a total of 1,400 from holding Scientific Games or generate 17.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Scientific Games vs. Airbus SE
Performance |
Timeline |
Scientific Games |
Airbus SE |
Scientific Games and Airbus SE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Scientific Games and Airbus SE
The main advantage of trading using opposite Scientific Games and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.Scientific Games vs. Highlight Communications AG | Scientific Games vs. SINGAPORE AIRLINES | Scientific Games vs. SOUTHWEST AIRLINES | Scientific Games vs. UNITED INTERNET N |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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