Correlation Between SCOR PK and Viscount Mining

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

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

Diversification Opportunities for SCOR PK and Viscount Mining

0.47

Correlation Coefficient

SCOR PK  Viscount Mining

Very weak diversification

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

Pair Corralation between SCOR PK and Viscount Mining

Assuming the 90 days horizon SCOR PK is expected to generate 6.98 times less return on investment than Viscount Mining. But when comparing it to its historical volatility, SCOR PK is 1.66 times less risky than Viscount Mining. It trades about 0.04 of its potential returns per unit of risk. Viscount Mining Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Viscount Mining Corp on November 29, 2024 and sell it today you would earn a total of  11.00  from holding Viscount Mining Corp or generate 64.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.72%
Values	Daily Returns

SCOR PK  vs.  Viscount Mining Corp

SCOR PK

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR PK are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SCOR PK may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Viscount Mining Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Viscount Mining Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Viscount Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SCOR PK and Viscount Mining

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

The idea behind SCOR PK and Viscount Mining Corp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.