Correlation Between SCB X and B GRIMM

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

By analyzing existing cross correlation between SCB X Public and B GRIMM POWER, you can compare the effects of market volatilities on SCB X and B GRIMM 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 SCB X with a short position of B GRIMM. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCB X and B GRIMM.

Diversification Opportunities for SCB X and B GRIMM

-0.77

Correlation Coefficient

SCB X  B GRIMM

Pay attention - limited upside

The 3 months correlation between SCB and BGRIM-R is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding SCB X Public and B GRIMM POWER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B GRIMM POWER and SCB X 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 SCB X Public are associated (or correlated) with B GRIMM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B GRIMM POWER has no effect on the direction of SCB X i.e., SCB X and B GRIMM go up and down completely randomly.

Pair Corralation between SCB X and B GRIMM

Assuming the 90 days trading horizon SCB X Public is expected to generate 0.41 times more return on investment than B GRIMM. However, SCB X Public is 2.44 times less risky than B GRIMM. It trades about 0.06 of its potential returns per unit of risk. B GRIMM POWER is currently generating about -0.05 per unit of risk. If you would invest  9,027  in SCB X Public on October 12, 2024 and sell it today you would earn a total of  2,873  from holding SCB X Public or generate 31.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

SCB X Public  vs.  B GRIMM POWER

SCB X Public

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SCB X Public are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, SCB X may actually be approaching a critical reversion point that can send shares even higher in February 2025.

B GRIMM POWER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days B GRIMM POWER has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with SCB X and B GRIMM

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

The idea behind SCB X Public and B GRIMM POWER 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.