Correlation Between Fidelity National and Scientific Games
Can any of the company-specific risk be diversified away by investing in both Fidelity National and Scientific Games 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 Fidelity National and Scientific Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity National Information and Scientific Games, you can compare the effects of market volatilities on Fidelity National and Scientific Games 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 Fidelity National with a short position of Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Scientific Games.
Diversification Opportunities for Fidelity National and Scientific Games
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and Scientific is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games and Fidelity National 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 Fidelity National Information are associated (or correlated) with Scientific Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientific Games has no effect on the direction of Fidelity National i.e., Fidelity National and Scientific Games go up and down completely randomly.
Pair Corralation between Fidelity National and Scientific Games
Assuming the 90 days trading horizon Fidelity National is expected to generate 1.66 times less return on investment than Scientific Games. But when comparing it to its historical volatility, Fidelity National Information is 1.22 times less risky than Scientific Games. It trades about 0.04 of its potential returns per unit of risk. Scientific Games is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,450 in Scientific Games on September 24, 2024 and sell it today you would earn a total of 2,750 from holding Scientific Games or generate 50.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fidelity National Information vs. Scientific Games
Performance |
Timeline |
Fidelity National |
Scientific Games |
Fidelity National and Scientific Games Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidelity National and Scientific Games
The main advantage of trading using opposite Fidelity National and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, Scientific Games 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 Scientific Games will offset losses from the drop in Scientific Games' long position.Fidelity National vs. FUYO GENERAL LEASE | Fidelity National vs. Fevertree Drinks PLC | Fidelity National vs. ALBIS LEASING AG | Fidelity National vs. SCANSOURCE |
Scientific Games vs. Fidelity National Information | Scientific Games vs. DOCDATA | Scientific Games vs. Harmony Gold Mining | Scientific Games vs. INFORMATION SVC GRP |
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 Stocks Directory module to find actively traded stocks across global markets.
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