Correlation Between SCOR PK and Large Cap

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

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

Diversification Opportunities for SCOR PK and Large Cap

0.14

Correlation Coefficient

SCOR PK  Large Cap

Average diversification

The 3 months correlation between SCOR and Large is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Large Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Value 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 Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Value has no effect on the direction of SCOR PK i.e., SCOR PK and Large Cap go up and down completely randomly.

Pair Corralation between SCOR PK and Large Cap

Assuming the 90 days horizon SCOR PK is expected to generate 2.6 times more return on investment than Large Cap. However, SCOR PK is 2.6 times more volatile than Large Cap Value. It trades about 0.03 of its potential returns per unit of risk. Large Cap Value is currently generating about 0.03 per unit of risk. If you would invest  195.00  in SCOR PK on September 12, 2024 and sell it today you would earn a total of  64.00  from holding SCOR PK or generate 32.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.39%
Values	Daily Returns

SCOR PK  vs.  Large Cap Value

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.

Large Cap Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Large Cap Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with SCOR PK and Large Cap

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

The idea behind SCOR PK and Large Cap Value 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..