Correlation Between Scout Mid and Scout E

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

By analyzing existing cross correlation between Scout Mid Cap and Scout E Plus, you can compare the effects of market volatilities on Scout Mid and Scout E 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 Scout Mid with a short position of Scout E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scout Mid and Scout E.

Diversification Opportunities for Scout Mid and Scout E

0.0

Correlation Coefficient

Scout Mid  Scout E

Pay attention - limited upside

The 3 months correlation between Scout and Scout is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Scout Mid Cap and Scout E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout E Plus and Scout Mid 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 Scout Mid Cap are associated (or correlated) with Scout E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout E Plus has no effect on the direction of Scout Mid i.e., Scout Mid and Scout E go up and down completely randomly.

Pair Corralation between Scout Mid and Scout E

If you would invest (100.00) in Scout E Plus on October 1, 2024 and sell it today you would earn a total of  100.00  from holding Scout E Plus or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Scout Mid Cap  vs.  Scout E Plus

Scout Mid Cap

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Scout Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Scout Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Scout E Plus

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Scout Mid and Scout E

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

The idea behind Scout Mid Cap and Scout E Plus 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.