Correlation Between SCOR PK and Themes Airlines
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Themes Airlines 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 PK and Themes Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Themes Airlines ETF, you can compare the effects of market volatilities on SCOR PK and Themes Airlines 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 PK with a short position of Themes Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Themes Airlines.
Diversification Opportunities for SCOR PK and Themes Airlines
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCOR and Themes is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Themes Airlines ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes Airlines ETF and SCOR PK 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 PK are associated (or correlated) with Themes Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes Airlines ETF has no effect on the direction of SCOR PK i.e., SCOR PK and Themes Airlines go up and down completely randomly.
Pair Corralation between SCOR PK and Themes Airlines
Assuming the 90 days horizon SCOR PK is expected to generate 4.04 times less return on investment than Themes Airlines. In addition to that, SCOR PK is 2.59 times more volatile than Themes Airlines ETF. It trades about 0.01 of its total potential returns per unit of risk. Themes Airlines ETF is currently generating about 0.06 per unit of volatility. If you would invest 2,535 in Themes Airlines ETF on December 4, 2024 and sell it today you would earn a total of 468.00 from holding Themes Airlines ETF or generate 18.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.78% |
Values | Daily Returns |
SCOR PK vs. Themes Airlines ETF
Performance |
Timeline |
SCOR PK |
Themes Airlines ETF |
SCOR PK and Themes Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SCOR PK and Themes Airlines
The main advantage of trading using opposite SCOR PK and Themes Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Themes Airlines 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 Themes Airlines will offset losses from the drop in Themes Airlines' long position.The idea behind SCOR PK and Themes Airlines ETF 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.Themes Airlines vs. Ultimus Managers Trust | Themes Airlines vs. American Beacon Select | Themes Airlines vs. First Trust Indxx | Themes Airlines vs. Direxion Daily Regional |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |