Correlation Between Scientific Games and Impinj

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

By analyzing existing cross correlation between Scientific Games and Impinj Inc, you can compare the effects of market volatilities on Scientific Games and Impinj 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 Impinj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and Impinj.

Diversification Opportunities for Scientific Games and Impinj

-0.61

Correlation Coefficient

Scientific Games  Impinj

Excellent diversification

The 3 months correlation between Scientific and Impinj is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games and Impinj Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impinj Inc 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 Impinj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impinj Inc has no effect on the direction of Scientific Games i.e., Scientific Games and Impinj go up and down completely randomly.

Pair Corralation between Scientific Games and Impinj

Assuming the 90 days horizon Scientific Games is expected to under-perform the Impinj. But the stock apears to be less risky and, when comparing its historical volatility, Scientific Games is 1.15 times less risky than Impinj. The stock trades about -0.03 of its potential returns per unit of risk. The Impinj Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  14,945  in Impinj Inc on September 2, 2024 and sell it today you would earn a total of  2,995  from holding Impinj Inc or generate 20.04% return on investment over 90 days.

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

Scientific Games  vs.  Impinj Inc

Scientific Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scientific Games has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Impinj Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Impinj Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Impinj reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Scientific Games and Impinj

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

The idea behind Scientific Games and Impinj Inc 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.