Correlation Between Gaming Realms and Scottish American

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

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

Diversification Opportunities for Gaming Realms and Scottish American

0.74

Correlation Coefficient

Gaming Realms  Scottish American

Poor diversification

The 3 months correlation between Gaming and Scottish is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Realms plc and Scottish American Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottish American and Gaming Realms 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 Gaming Realms plc are associated (or correlated) with Scottish American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottish American has no effect on the direction of Gaming Realms i.e., Gaming Realms and Scottish American go up and down completely randomly.

Pair Corralation between Gaming Realms and Scottish American

Assuming the 90 days trading horizon Gaming Realms plc is expected to generate 2.74 times more return on investment than Scottish American. However, Gaming Realms is 2.74 times more volatile than Scottish American Investment. It trades about 0.22 of its potential returns per unit of risk. Scottish American Investment is currently generating about 0.0 per unit of risk. If you would invest  4,650  in Gaming Realms plc on April 17, 2025 and sell it today you would earn a total of  750.00  from holding Gaming Realms plc or generate 16.13% return on investment over 90 days.

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

Gaming Realms plc  vs.  Scottish American Investment

Gaming Realms plc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gaming Realms plc are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Gaming Realms exhibited solid returns over the last few months and may actually be approaching a breakup point.

Scottish American

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Scottish American Investment are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Scottish American may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Gaming Realms and Scottish American

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

The idea behind Gaming Realms plc and Scottish American Investment 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.