Correlation Between SCOR PK and Simt E

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

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

Diversification Opportunities for SCOR PK and Simt E

-0.34

Correlation Coefficient

SCOR PK  Simt E

Very good diversification

The 3 months correlation between SCOR and Simt is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Simt E Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt E Fixed 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 Simt E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt E Fixed has no effect on the direction of SCOR PK i.e., SCOR PK and Simt E go up and down completely randomly.

Pair Corralation between SCOR PK and Simt E

Assuming the 90 days horizon SCOR PK is expected to generate 10.47 times more return on investment than Simt E. However, SCOR PK is 10.47 times more volatile than Simt E Fixed. It trades about 0.32 of its potential returns per unit of risk. Simt E Fixed is currently generating about 0.29 per unit of risk. If you would invest  214.00  in SCOR PK on September 13, 2024 and sell it today you would earn a total of  42.00  from holding SCOR PK or generate 19.63% return on investment over 90 days.

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

SCOR PK  vs.  Simt E Fixed

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.

Simt E Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simt E Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Simt E 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 Simt E

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

The idea behind SCOR PK and Simt E Fixed 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.

Check out your portfolio center.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.