Correlation Between SCOR PK and Aqr International

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

By analyzing existing cross correlation between SCOR PK and Aqr International Defensive, you can compare the effects of market volatilities on SCOR PK and Aqr International 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 Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Aqr International.

Diversification Opportunities for SCOR PK and Aqr International

0.83

Correlation Coefficient

SCOR PK  Aqr International

Very poor diversification

The 3 months correlation between SCOR and Aqr is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Aqr International Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International 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 Aqr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr International has no effect on the direction of SCOR PK i.e., SCOR PK and Aqr International go up and down completely randomly.

Pair Corralation between SCOR PK and Aqr International

Assuming the 90 days horizon SCOR PK is expected to generate 4.89 times more return on investment than Aqr International. However, SCOR PK is 4.89 times more volatile than Aqr International Defensive. It trades about 0.09 of its potential returns per unit of risk. Aqr International Defensive is currently generating about 0.18 per unit of risk. If you would invest  260.00  in SCOR PK on December 24, 2024 and sell it today you would earn a total of  43.00  from holding SCOR PK or generate 16.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

SCOR PK  vs.  Aqr International Defensive

SCOR PK

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR PK are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SCOR PK showed solid returns over the last few months and may actually be approaching a breakup point.

Aqr International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr International Defensive are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Aqr International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SCOR PK and Aqr International

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

The idea behind SCOR PK and Aqr International Defensive 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.