Correlation Between Tradegate and Scientific Games

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

By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and Scientific Games, you can compare the effects of market volatilities on Tradegate 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 Tradegate with a short position of Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and Scientific Games.

Diversification Opportunities for Tradegate and Scientific Games

0.06

Correlation Coefficient

Tradegate  Scientific Games

Significant diversification

The 3 months correlation between Tradegate and Scientific is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games and Tradegate 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 Tradegate AG Wertpapierhandelsbank 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 Tradegate i.e., Tradegate and Scientific Games go up and down completely randomly.

Pair Corralation between Tradegate and Scientific Games

Assuming the 90 days horizon Tradegate is expected to generate 11.17 times less return on investment than Scientific Games. But when comparing it to its historical volatility, Tradegate AG Wertpapierhandelsbank is 2.55 times less risky than Scientific Games. It trades about 0.0 of its potential returns per unit of risk. Scientific Games is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8,150  in Scientific Games on September 29, 2024 and sell it today you would earn a total of  100.00  from holding Scientific Games or generate 1.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Tradegate AG Wertpapierhandels  vs.  Scientific Games

Tradegate AG Wertpap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Scientific Games

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Scientific Games are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Scientific Games is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tradegate and Scientific Games

The main advantage of trading using opposite Tradegate and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate 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.

The idea behind Tradegate AG Wertpapierhandelsbank and Scientific Games 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 Transaction History module to view history of all your transactions and understand their impact on performance.