Correlation Between Scentre and Silicon Gaming

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

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

Diversification Opportunities for Scentre and Silicon Gaming

0.0

Correlation Coefficient

Scentre  Silicon Gaming

Pay attention - limited upside

The 3 months correlation between Scentre and Silicon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Scentre Group and Silicon Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Gaming and Scentre 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 Scentre Group 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 Scentre i.e., Scentre and Silicon Gaming go up and down completely randomly.

Pair Corralation between Scentre and Silicon Gaming

If you would invest  3.92  in Silicon Gaming on September 12, 2024 and sell it today you would earn a total of  3.08  from holding Silicon Gaming or generate 78.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Scentre Group  vs.  Silicon Gaming

Scentre Group

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Scentre Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Scentre is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Silicon Gaming

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Silicon Gaming are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, Silicon Gaming exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Scentre and Silicon Gaming

The main advantage of trading using opposite Scentre and Silicon Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scentre 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 Scentre Group 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.