Correlation Between SCOR PK and Initio

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

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

Diversification Opportunities for SCOR PK and Initio

0.0

Correlation Coefficient

SCOR PK  Initio

Pay attention - limited upside

The 3 months correlation between SCOR and Initio is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Initio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Initio Inc 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 Initio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Initio Inc has no effect on the direction of SCOR PK i.e., SCOR PK and Initio go up and down completely randomly.

Pair Corralation between SCOR PK and Initio

If you would invest  213.00  in SCOR PK on September 5, 2024 and sell it today you would earn a total of  35.00  from holding SCOR PK or generate 16.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

SCOR PK  vs.  Initio Inc

SCOR PK

Risk-Adjusted Performance

7 of 100

OK

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.

Initio Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Initio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Initio is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SCOR PK and Initio

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

The idea behind SCOR PK and Initio Inc 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.