Correlation Between SCOR PK and VanEck ETF

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

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

Diversification Opportunities for SCOR PK and VanEck ETF

0.76

Correlation Coefficient

SCOR PK  VanEck ETF

Poor diversification

The 3 months correlation between SCOR and VanEck is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and VanEck ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ETF Trust 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 VanEck ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ETF Trust has no effect on the direction of SCOR PK i.e., SCOR PK and VanEck ETF go up and down completely randomly.

Pair Corralation between SCOR PK and VanEck ETF

Assuming the 90 days horizon SCOR PK is expected to generate 52.34 times more return on investment than VanEck ETF. However, SCOR PK is 52.34 times more volatile than VanEck ETF Trust. It trades about 0.12 of its potential returns per unit of risk. VanEck ETF Trust is currently generating about 0.56 per unit of risk. If you would invest  216.00  in SCOR PK on September 12, 2024 and sell it today you would earn a total of  40.00  from holding SCOR PK or generate 18.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

SCOR PK  vs.  VanEck ETF Trust

SCOR PK

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR PK are ranked lower than 9 (%) 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.

VanEck ETF Trust

Risk-Adjusted Performance

44 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck ETF Trust are ranked lower than 44 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, VanEck ETF is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SCOR PK and VanEck ETF

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

The idea behind SCOR PK and VanEck ETF Trust 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.