Correlation Between SCOR PK and Carillon Chartwell

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

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

Diversification Opportunities for SCOR PK and Carillon Chartwell

0.28

Correlation Coefficient

SCOR PK  Carillon Chartwell

Modest diversification

The 3 months correlation between SCOR and Carillon is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Carillon Chartwell Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carillon Chartwell Small 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 Carillon Chartwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carillon Chartwell Small has no effect on the direction of SCOR PK i.e., SCOR PK and Carillon Chartwell go up and down completely randomly.

Pair Corralation between SCOR PK and Carillon Chartwell

Assuming the 90 days horizon SCOR PK is expected to generate 1.63 times less return on investment than Carillon Chartwell. In addition to that, SCOR PK is 2.18 times more volatile than Carillon Chartwell Small. It trades about 0.02 of its total potential returns per unit of risk. Carillon Chartwell Small is currently generating about 0.09 per unit of volatility. If you would invest  1,460  in Carillon Chartwell Small on October 24, 2024 and sell it today you would earn a total of  327.00  from holding Carillon Chartwell Small or generate 22.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	37.68%
Values	Daily Returns

SCOR PK  vs.  Carillon Chartwell Small

SCOR PK

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR PK are ranked lower than 8 (%) 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.

Carillon Chartwell Small

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Carillon Chartwell Small are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Carillon Chartwell is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SCOR PK and Carillon Chartwell

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

The idea behind SCOR PK and Carillon Chartwell Small 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.