Correlation Between Scottish Mortgage and Highlight Communications
Can any of the company-specific risk be diversified away by investing in both Scottish Mortgage and Highlight Communications 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 Scottish Mortgage and Highlight Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottish Mortgage Investment and Highlight Communications AG, you can compare the effects of market volatilities on Scottish Mortgage and Highlight Communications 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 Scottish Mortgage with a short position of Highlight Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish Mortgage and Highlight Communications.
Diversification Opportunities for Scottish Mortgage and Highlight Communications
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scottish and Highlight is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Scottish Mortgage Investment and Highlight Communications AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlight Communications and Scottish Mortgage 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 Scottish Mortgage Investment are associated (or correlated) with Highlight Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highlight Communications has no effect on the direction of Scottish Mortgage i.e., Scottish Mortgage and Highlight Communications go up and down completely randomly.
Pair Corralation between Scottish Mortgage and Highlight Communications
Assuming the 90 days trading horizon Scottish Mortgage Investment is expected to generate 0.54 times more return on investment than Highlight Communications. However, Scottish Mortgage Investment is 1.85 times less risky than Highlight Communications. It trades about 0.06 of its potential returns per unit of risk. Highlight Communications AG is currently generating about -0.05 per unit of risk. If you would invest 831.00 in Scottish Mortgage Investment on October 11, 2024 and sell it today you would earn a total of 366.00 from holding Scottish Mortgage Investment or generate 44.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Scottish Mortgage Investment vs. Highlight Communications AG
Performance |
| Timeline |
| Scottish Mortgage |
| Highlight Communications |
Scottish Mortgage and Highlight Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottish Mortgage and Highlight Communications
The main advantage of trading using opposite Scottish Mortgage and Highlight Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottish Mortgage position performs unexpectedly, Highlight Communications 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 Highlight Communications will offset losses from the drop in Highlight Communications' long position.| Scottish Mortgage vs. Cogent Communications Holdings | Scottish Mortgage vs. CRISPR Therapeutics AG | Scottish Mortgage vs. INTERCONT HOTELS | Scottish Mortgage vs. Rocket Internet SE |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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