Correlation Between Comscore and Sabio Holdings

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

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

Diversification Opportunities for Comscore and Sabio Holdings

0.22

Correlation Coefficient

Comscore  Sabio Holdings

Modest diversification

The 3 months correlation between Comscore and Sabio is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Comscore and Sabio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabio Holdings and Comscore 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 Comscore are associated (or correlated) with Sabio Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabio Holdings has no effect on the direction of Comscore i.e., Comscore and Sabio Holdings go up and down completely randomly.

Pair Corralation between Comscore and Sabio Holdings

Given the investment horizon of 90 days Comscore is expected to generate 1.2 times more return on investment than Sabio Holdings. However, Comscore is 1.2 times more volatile than Sabio Holdings. It trades about 0.05 of its potential returns per unit of risk. Sabio Holdings is currently generating about -0.02 per unit of risk. If you would invest  676.00  in Comscore on September 13, 2024 and sell it today you would earn a total of  33.00  from holding Comscore or generate 4.88% return on investment over 90 days.

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

Comscore  vs.  Sabio Holdings

Comscore

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Comscore are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Comscore reported solid returns over the last few months and may actually be approaching a breakup point.

Sabio Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sabio Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sabio Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Comscore and Sabio Holdings

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

The idea behind Comscore and Sabio 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.