Correlation Between SCB X and Country Group

Can any of the company-specific risk be diversified away by investing in both SCB X and Country Group 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 Country Group 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 Country Group Holdings, you can compare the effects of market volatilities on SCB X and Country Group 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 Country Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCB X and Country Group.

Diversification Opportunities for SCB X and Country Group

-0.69

Correlation Coefficient

SCB X  Country Group

Excellent diversification

The 3 months correlation between SCB and Country is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding SCB X Public and Country Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Group Holdings 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 Country Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Group Holdings has no effect on the direction of SCB X i.e., SCB X and Country Group go up and down completely randomly.

Pair Corralation between SCB X and Country Group

Assuming the 90 days trading horizon SCB X is expected to generate 34.8 times less return on investment than Country Group. But when comparing it to its historical volatility, SCB X Public is 58.99 times less risky than Country Group. It trades about 0.09 of its potential returns per unit of risk. Country Group Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  72.00  in Country Group Holdings on September 23, 2024 and sell it today you would lose (7.00) from holding Country Group Holdings or give up 9.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.62%
Values	Daily Returns

SCB X Public  vs.  Country Group Holdings

SCB X Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SCB X Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, SCB X is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Country Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Country Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with SCB X and Country Group

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

The idea behind SCB X Public and Country Group Holdings 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.