Correlation Between Scottie Resources and Polymetal International

Can any of the company-specific risk be diversified away by investing in both Scottie Resources and Polymetal International 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 Polymetal International 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 Polymetal International PLC, you can compare the effects of market volatilities on Scottie Resources and Polymetal International 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 Polymetal International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottie Resources and Polymetal International.

Diversification Opportunities for Scottie Resources and Polymetal International

0.69

Correlation Coefficient

Scottie Resources  Polymetal International

Poor diversification

The 3 months correlation between Scottie and Polymetal is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Scottie Resources Corp and Polymetal International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polymetal International 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 Polymetal International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polymetal International has no effect on the direction of Scottie Resources i.e., Scottie Resources and Polymetal International go up and down completely randomly.

Pair Corralation between Scottie Resources and Polymetal International

If you would invest  140.00  in Polymetal International PLC on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Polymetal International PLC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Scottie Resources Corp  vs.  Polymetal International PLC

Scottie Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scottie Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Scottie Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Polymetal International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polymetal International PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Polymetal International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Scottie Resources and Polymetal International

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

The idea behind Scottie Resources Corp and Polymetal International PLC 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.