Correlation Between SCOR PK and Fidelity MSCI

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

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

Diversification Opportunities for SCOR PK and Fidelity MSCI

0.75

Correlation Coefficient

SCOR PK  Fidelity MSCI

Poor diversification

The 3 months correlation between SCOR and Fidelity is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Fidelity MSCI Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity MSCI Information 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 Fidelity MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity MSCI Information has no effect on the direction of SCOR PK i.e., SCOR PK and Fidelity MSCI go up and down completely randomly.

Pair Corralation between SCOR PK and Fidelity MSCI

Assuming the 90 days horizon SCOR PK is expected to under-perform the Fidelity MSCI. In addition to that, SCOR PK is 2.32 times more volatile than Fidelity MSCI Information. It trades about -0.01 of its total potential returns per unit of risk. Fidelity MSCI Information is currently generating about 0.05 per unit of volatility. If you would invest  17,466  in Fidelity MSCI Information on September 16, 2024 and sell it today you would earn a total of  1,587  from holding Fidelity MSCI Information or generate 9.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

SCOR PK  vs.  Fidelity MSCI Information

SCOR PK

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR PK are ranked lower than 6 (%) 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.

Fidelity MSCI Information

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity MSCI Information are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Fidelity MSCI exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SCOR PK and Fidelity MSCI

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

The idea behind SCOR PK and Fidelity MSCI Information 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.