Correlation Between SCOR SE and Bilendi

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

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

Diversification Opportunities for SCOR SE and Bilendi

0.56

Correlation Coefficient

SCOR SE  Bilendi

Very weak diversification

The 3 months correlation between SCOR and Bilendi is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SCOR SE and Bilendi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilendi and SCOR SE 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 SCOR SE are associated (or correlated) with Bilendi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilendi has no effect on the direction of SCOR SE i.e., SCOR SE and Bilendi go up and down completely randomly.

Pair Corralation between SCOR SE and Bilendi

Assuming the 90 days trading horizon SCOR SE is expected to generate 0.64 times more return on investment than Bilendi. However, SCOR SE is 1.57 times less risky than Bilendi. It trades about 0.18 of its potential returns per unit of risk. Bilendi is currently generating about 0.11 per unit of risk. If you would invest  2,350  in SCOR SE on December 30, 2024 and sell it today you would earn a total of  412.00  from holding SCOR SE or generate 17.53% return on investment over 90 days.

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

SCOR SE  vs.  Bilendi

SCOR SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR SE are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SCOR SE sustained solid returns over the last few months and may actually be approaching a breakup point.

Bilendi

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bilendi are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bilendi reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SCOR SE and Bilendi

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

The idea behind SCOR SE and Bilendi 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.