Correlation Between SCUT SA and Turism Hotelur

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

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

Diversification Opportunities for SCUT SA and Turism Hotelur

0.05

Correlation Coefficient

SCUT SA  Turism Hotelur

Significant diversification

The 3 months correlation between SCUT and Turism is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SCUT SA BACAU and Turism Hotelur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turism Hotelur and SCUT SA 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 SCUT SA BACAU are associated (or correlated) with Turism Hotelur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turism Hotelur has no effect on the direction of SCUT SA i.e., SCUT SA and Turism Hotelur go up and down completely randomly.

Pair Corralation between SCUT SA and Turism Hotelur

Assuming the 90 days trading horizon SCUT SA BACAU is expected to generate 1.0 times more return on investment than Turism Hotelur. However, SCUT SA is 1.0 times more volatile than Turism Hotelur. It trades about 0.19 of its potential returns per unit of risk. Turism Hotelur is currently generating about 0.04 per unit of risk. If you would invest  2,360  in SCUT SA BACAU on December 21, 2024 and sell it today you would earn a total of  880.00  from holding SCUT SA BACAU or generate 37.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SCUT SA BACAU  vs.  Turism Hotelur

SCUT SA BACAU

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SCUT SA BACAU are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, SCUT SA displayed solid returns over the last few months and may actually be approaching a breakup point.

Turism Hotelur

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turism Hotelur are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Turism Hotelur may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SCUT SA and Turism Hotelur

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

The idea behind SCUT SA BACAU and Turism Hotelur 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.