Correlation Between Cameo Communications and ScinoPharm Taiwan

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

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

Diversification Opportunities for Cameo Communications and ScinoPharm Taiwan

0.0

Correlation Coefficient

Cameo Communications  ScinoPharm Taiwan

Pay attention - limited upside

The 3 months correlation between Cameo and ScinoPharm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cameo Communications and ScinoPharm Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScinoPharm Taiwan and Cameo Communications 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 Cameo Communications are associated (or correlated) with ScinoPharm Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScinoPharm Taiwan has no effect on the direction of Cameo Communications i.e., Cameo Communications and ScinoPharm Taiwan go up and down completely randomly.

Pair Corralation between Cameo Communications and ScinoPharm Taiwan

If you would invest (100.00) in ScinoPharm Taiwan on October 10, 2024 and sell it today you would earn a total of  100.00  from holding ScinoPharm Taiwan or generate -100.0% return on investment over 90 days.

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

Cameo Communications  vs.  ScinoPharm Taiwan

Cameo Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cameo Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Cameo Communications is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ScinoPharm Taiwan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ScinoPharm Taiwan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ScinoPharm Taiwan is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Cameo Communications and ScinoPharm Taiwan

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

The idea behind Cameo Communications and ScinoPharm Taiwan 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 Stocks Directory module to find actively traded stocks across global markets.