diversifiable risk of combining Scientific Games and Sankyo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Games and Sankyo Co, you can compare the effects of market volatilities on Scientific Games and Sankyo 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 Sankyo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and Sankyo.
Diversification Opportunities for Scientific Games and Sankyo
Pair Corralation between Scientific Games and Sankyo
Assuming the 90 days horizon Scientific Games is expected to generate 1.01 times more return on investment than Sankyo. However, Scientific Games is 1.01 times more volatile than Sankyo Co. It trades about 0.52 of its potential returns per unit of risk. Sankyo Co is currently generating about -0.19 per unit of risk. If you would invest 7,450 in Scientific Games on December 3, 2023 and sell it today you would earn a total of 1,850 from holding Scientific Games or generate 24.83% return on investment over 90 days.
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Scientific Games vs. Sankyo Co
Scientific Games and Sankyo Volatility Contrast
Pair Trading with Scientific Games and SankyoThe main advantage of trading using opposite Scientific Games and Sankyo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games position performs unexpectedly, Sankyo 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 Sankyo will offset losses from the drop in Sankyo's long position. The idea behind Scientific Games and Sankyo Co 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.
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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