Correlation Between SCB X and Quality Houses
Can any of the company-specific risk be diversified away by investing in both SCB X and Quality Houses 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 Quality Houses 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 Quality Houses Public, you can compare the effects of market volatilities on SCB X and Quality Houses 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 Quality Houses. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCB X and Quality Houses.
Diversification Opportunities for SCB X and Quality Houses
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCB and Quality is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SCB X Public and Quality Houses Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quality Houses Public 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 Quality Houses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quality Houses Public has no effect on the direction of SCB X i.e., SCB X and Quality Houses go up and down completely randomly.
Pair Corralation between SCB X and Quality Houses
Assuming the 90 days trading horizon SCB X Public is expected to generate 0.9 times more return on investment than Quality Houses. However, SCB X Public is 1.11 times less risky than Quality Houses. It trades about 0.11 of its potential returns per unit of risk. Quality Houses Public is currently generating about -0.14 per unit of risk. If you would invest 11,750 in SCB X Public on December 29, 2024 and sell it today you would earn a total of 800.00 from holding SCB X Public or generate 6.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SCB X Public vs. Quality Houses Public
Performance |
Timeline |
SCB X Public |
Quality Houses Public |
SCB X and Quality Houses Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SCB X and Quality Houses
The main advantage of trading using opposite SCB X and Quality Houses positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCB X position performs unexpectedly, Quality Houses 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 Quality Houses will offset losses from the drop in Quality Houses' long position.SCB X vs. Bumrungrad Hospital PCL | SCB X vs. AAPICO Hitech Public | SCB X vs. Unique Mining Services | SCB X vs. Sabuy Technology Public |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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