Correlation Between Scottie Resources and Aeroports

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

By analyzing existing cross correlation between Scottie Resources Corp and Aeroports de Paris, you can compare the effects of market volatilities on Scottie Resources and Aeroports 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 Scottie Resources with a short position of Aeroports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottie Resources and Aeroports.

Diversification Opportunities for Scottie Resources and Aeroports

0.21

Correlation Coefficient

Scottie Resources  Aeroports

Modest diversification

The 3 months correlation between Scottie and Aeroports is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Scottie Resources Corp and Aeroports de Paris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeroports de Paris and Scottie Resources 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 Scottie Resources Corp are associated (or correlated) with Aeroports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeroports de Paris has no effect on the direction of Scottie Resources i.e., Scottie Resources and Aeroports go up and down completely randomly.

Pair Corralation between Scottie Resources and Aeroports

Assuming the 90 days horizon Scottie Resources Corp is expected to generate 1.89 times more return on investment than Aeroports. However, Scottie Resources is 1.89 times more volatile than Aeroports de Paris. It trades about 0.06 of its potential returns per unit of risk. Aeroports de Paris is currently generating about 0.05 per unit of risk. If you would invest  58.00  in Scottie Resources Corp on December 30, 2024 and sell it today you would earn a total of  7.00  from holding Scottie Resources Corp or generate 12.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Scottie Resources Corp  vs.  Aeroports de Paris

Scottie Resources Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Scottie Resources Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Scottie Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Aeroports de Paris

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aeroports de Paris are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Aeroports may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Scottie Resources and Aeroports

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

The idea behind Scottie Resources Corp and Aeroports de Paris 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.