Correlation Between SCOR SE and Energisme

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Can any of the company-specific risk be diversified away by investing in both SCOR SE and Energisme 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 Energisme into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR SE and Energisme, you can compare the effects of market volatilities on SCOR SE and Energisme 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 Energisme. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR SE and Energisme.

Diversification Opportunities for SCOR SE and Energisme

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between SCOR and Energisme is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding SCOR SE and Energisme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energisme 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 Energisme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energisme has no effect on the direction of SCOR SE i.e., SCOR SE and Energisme go up and down completely randomly.

Pair Corralation between SCOR SE and Energisme

Assuming the 90 days trading horizon SCOR SE is expected to generate 0.44 times more return on investment than Energisme. However, SCOR SE is 2.28 times less risky than Energisme. It trades about 0.13 of its potential returns per unit of risk. Energisme is currently generating about 0.0 per unit of risk. If you would invest  2,006  in SCOR SE on September 29, 2024 and sell it today you would earn a total of  342.00  from holding SCOR SE or generate 17.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SCOR SE  vs.  Energisme

 Performance 
       Timeline  
SCOR SE 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SCOR SE are ranked lower than 10 (%) 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.
Energisme 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Energisme has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Energisme is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

SCOR SE and Energisme Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SCOR SE and Energisme

The main advantage of trading using opposite SCOR SE and Energisme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR SE position performs unexpectedly, Energisme 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 Energisme will offset losses from the drop in Energisme's long position.
The idea behind SCOR SE and Energisme 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.
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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