Correlation Between Scientific Games and Sankyo

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Can any of the company-specific risk be diversified away by investing in both Scientific Games and Sankyo 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 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

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between Scientific and Sankyo is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games and Sankyo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sankyo 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 Sankyo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sankyo has no effect on the direction of Scientific Games i.e., Scientific Games and Sankyo go up and down completely randomly.

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.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.65%
ValuesDaily Returns

Scientific Games  vs.  Sankyo Co

 Performance 
       Timeline  
Scientific Games 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Scientific Games are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Scientific Games may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Sankyo 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Sankyo Co are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sankyo reported solid returns over the last few months and may actually be approaching a breakup point.

Scientific Games and Sankyo Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Scientific Games and Sankyo

The 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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