Correlation Between Scorpius Holdings and Cingulate

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

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

Diversification Opportunities for Scorpius Holdings and Cingulate

0.71

Correlation Coefficient

Scorpius Holdings  Cingulate

Poor diversification

The 3 months correlation between Scorpius and Cingulate is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Scorpius Holdings and Cingulate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cingulate and Scorpius Holdings 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 Scorpius Holdings are associated (or correlated) with Cingulate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cingulate has no effect on the direction of Scorpius Holdings i.e., Scorpius Holdings and Cingulate go up and down completely randomly.

Pair Corralation between Scorpius Holdings and Cingulate

Given the investment horizon of 90 days Scorpius Holdings is expected to under-perform the Cingulate. In addition to that, Scorpius Holdings is 3.39 times more volatile than Cingulate. It trades about -0.03 of its total potential returns per unit of risk. Cingulate is currently generating about -0.07 per unit of volatility. If you would invest  476.00  in Cingulate on December 23, 2024 and sell it today you would lose (80.00) from holding Cingulate or give up 16.81% of portfolio value over 90 days.

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

Scorpius Holdings  vs.  Cingulate

Scorpius Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scorpius Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Cingulate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cingulate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Scorpius Holdings and Cingulate

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

The idea behind Scorpius Holdings and Cingulate 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .