Correlation Between SCOR PK and Spectrum International

Can any of the company-specific risk be diversified away by investing in both SCOR PK and Spectrum 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 Spectrum 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 Spectrum International Fund, you can compare the effects of market volatilities on SCOR PK and Spectrum 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 Spectrum International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Spectrum International.

Diversification Opportunities for SCOR PK and Spectrum International

-0.47

Correlation Coefficient

SCOR PK  Spectrum International

Very good diversification

The 3 months correlation between SCOR and Spectrum is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Spectrum International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum 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 Spectrum International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum International has no effect on the direction of SCOR PK i.e., SCOR PK and Spectrum International go up and down completely randomly.

Pair Corralation between SCOR PK and Spectrum International

Assuming the 90 days horizon SCOR PK is expected to under-perform the Spectrum International. In addition to that, SCOR PK is 4.01 times more volatile than Spectrum International Fund. It trades about -0.03 of its total potential returns per unit of risk. Spectrum International Fund is currently generating about 0.0 per unit of volatility. If you would invest  1,486  in Spectrum International Fund on September 13, 2024 and sell it today you would lose (2.00) from holding Spectrum International Fund or give up 0.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.32%
Values	Daily Returns

SCOR PK  vs.  Spectrum International Fund

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.

Spectrum International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spectrum International Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Spectrum International 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 Spectrum International

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

The idea behind SCOR PK and Spectrum International Fund 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.