Correlation Between Amer Sports, and SCCB

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

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

Diversification Opportunities for Amer Sports, and SCCB

0.92

Correlation Coefficient

Amer Sports,  SCCB

Almost no diversification

The 3 months correlation between Amer and SCCB is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and SCCB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCCB and Amer Sports, 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 Amer Sports, are associated (or correlated) with SCCB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCCB has no effect on the direction of Amer Sports, i.e., Amer Sports, and SCCB go up and down completely randomly.

Pair Corralation between Amer Sports, and SCCB

If you would invest  1,339  in Amer Sports, on October 3, 2024 and sell it today you would earn a total of  1,457  from holding Amer Sports, or generate 108.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	1.19%
Values	Daily Returns

Amer Sports,  vs.  SCCB

Amer Sports,

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.

SCCB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCCB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, SCCB is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amer Sports, and SCCB

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

The idea behind Amer Sports, and SCCB 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.