Correlation Between Realty Income and Silicon Gaming

Can any of the company-specific risk be diversified away by investing in both Realty Income and Silicon Gaming 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 Realty Income and Silicon Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Realty Income and Silicon Gaming, you can compare the effects of market volatilities on Realty Income and Silicon Gaming 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 Realty Income with a short position of Silicon Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realty Income and Silicon Gaming.

Diversification Opportunities for Realty Income and Silicon Gaming

-0.91

Correlation Coefficient

Realty Income  Silicon Gaming

Pay attention - limited upside

The 3 months correlation between Realty and Silicon is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Realty Income and Silicon Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Gaming and Realty Income 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 Realty Income are associated (or correlated) with Silicon Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Gaming has no effect on the direction of Realty Income i.e., Realty Income and Silicon Gaming go up and down completely randomly.

Pair Corralation between Realty Income and Silicon Gaming

If you would invest  6.00  in Silicon Gaming on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Silicon Gaming or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Realty Income  vs.  Silicon Gaming

Realty Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Realty Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Silicon Gaming

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Silicon Gaming are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Silicon Gaming exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Realty Income and Silicon Gaming

The main advantage of trading using opposite Realty Income and Silicon Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realty Income position performs unexpectedly, Silicon Gaming 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 Silicon Gaming will offset losses from the drop in Silicon Gaming's long position.

The idea behind Realty Income and Silicon Gaming 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.