Correlation Between SCOR PK and Timothy Large/mid-cap

Can any of the company-specific risk be diversified away by investing in both SCOR PK and Timothy Large/mid-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 Timothy Large/mid-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 Timothy Largemid Cap Value, you can compare the effects of market volatilities on SCOR PK and Timothy Large/mid-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 Timothy Large/mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Timothy Large/mid-cap.

Diversification Opportunities for SCOR PK and Timothy Large/mid-cap

-0.35

Correlation Coefficient

SCOR PK  Timothy Large/mid-cap

Very good diversification

The 3 months correlation between SCOR and Timothy is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Timothy Largemid Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Large/mid-cap 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 Timothy Large/mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Large/mid-cap has no effect on the direction of SCOR PK i.e., SCOR PK and Timothy Large/mid-cap go up and down completely randomly.

Pair Corralation between SCOR PK and Timothy Large/mid-cap

Assuming the 90 days horizon SCOR PK is expected to generate 3.88 times more return on investment than Timothy Large/mid-cap. However, SCOR PK is 3.88 times more volatile than Timothy Largemid Cap Value. It trades about 0.11 of its potential returns per unit of risk. Timothy Largemid Cap Value is currently generating about 0.0 per unit of risk. If you would invest  244.00  in SCOR PK on December 28, 2024 and sell it today you would earn a total of  50.00  from holding SCOR PK or generate 20.49% 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.  Timothy Largemid Cap Value

SCOR PK

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR PK are ranked lower than 8 (%) 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.

Timothy Large/mid-cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Timothy Largemid Cap Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Timothy Large/mid-cap 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 Timothy Large/mid-cap

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

The idea behind SCOR PK and Timothy Largemid 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.