Correlation Between Scottish Mortgage and HAPAG-LLOYD UNSPADR

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

By analyzing existing cross correlation between Scottish Mortgage Investment and HAPAG LLOYD UNSPADR 12, you can compare the effects of market volatilities on Scottish Mortgage and HAPAG-LLOYD UNSPADR 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 Scottish Mortgage with a short position of HAPAG-LLOYD UNSPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish Mortgage and HAPAG-LLOYD UNSPADR.

Diversification Opportunities for Scottish Mortgage and HAPAG-LLOYD UNSPADR

0.03

Correlation Coefficient

Scottish Mortgage  HAPAG-LLOYD UNSPADR

Significant diversification

The 3 months correlation between Scottish and HAPAG-LLOYD is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Scottish Mortgage Investment and HAPAG LLOYD UNSPADR 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAPAG LLOYD UNSPADR and Scottish Mortgage 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 Scottish Mortgage Investment are associated (or correlated) with HAPAG-LLOYD UNSPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAPAG LLOYD UNSPADR has no effect on the direction of Scottish Mortgage i.e., Scottish Mortgage and HAPAG-LLOYD UNSPADR go up and down completely randomly.

Pair Corralation between Scottish Mortgage and HAPAG-LLOYD UNSPADR

Assuming the 90 days trading horizon Scottish Mortgage Investment is expected to generate 0.27 times more return on investment than HAPAG-LLOYD UNSPADR. However, Scottish Mortgage Investment is 3.77 times less risky than HAPAG-LLOYD UNSPADR. It trades about 0.16 of its potential returns per unit of risk. HAPAG LLOYD UNSPADR 12 is currently generating about -0.01 per unit of risk. If you would invest  1,168  in Scottish Mortgage Investment on October 12, 2024 and sell it today you would earn a total of  29.00  from holding Scottish Mortgage Investment or generate 2.48% return on investment over 90 days.

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

Scottish Mortgage Investment  vs.  HAPAG LLOYD UNSPADR 12

Scottish Mortgage

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Scottish Mortgage Investment are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Scottish Mortgage reported solid returns over the last few months and may actually be approaching a breakup point.

HAPAG LLOYD UNSPADR

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HAPAG LLOYD UNSPADR 12 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HAPAG-LLOYD UNSPADR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Scottish Mortgage and HAPAG-LLOYD UNSPADR

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

The idea behind Scottish Mortgage Investment and HAPAG LLOYD UNSPADR 12 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.