Correlation Between Scepter Holdings and BioAdaptives
Can any of the company-specific risk be diversified away by investing in both Scepter Holdings and BioAdaptives 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 Scepter Holdings and BioAdaptives into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scepter Holdings and BioAdaptives, you can compare the effects of market volatilities on Scepter Holdings and BioAdaptives 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 Scepter Holdings with a short position of BioAdaptives. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scepter Holdings and BioAdaptives.
Diversification Opportunities for Scepter Holdings and BioAdaptives
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scepter and BioAdaptives is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Scepter Holdings and BioAdaptives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioAdaptives and Scepter Holdings 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 Scepter Holdings are associated (or correlated) with BioAdaptives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioAdaptives has no effect on the direction of Scepter Holdings i.e., Scepter Holdings and BioAdaptives go up and down completely randomly.
Pair Corralation between Scepter Holdings and BioAdaptives
Given the investment horizon of 90 days Scepter Holdings is expected to generate 5.02 times less return on investment than BioAdaptives. But when comparing it to its historical volatility, Scepter Holdings is 4.68 times less risky than BioAdaptives. It trades about 0.1 of its potential returns per unit of risk. BioAdaptives is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.05 in BioAdaptives on September 2, 2024 and sell it today you would earn a total of 7.95 from holding BioAdaptives or generate 15900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Scepter Holdings vs. BioAdaptives
Performance |
| Timeline |
| Scepter Holdings |
| BioAdaptives |
Scepter Holdings and BioAdaptives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scepter Holdings and BioAdaptives
The main advantage of trading using opposite Scepter Holdings and BioAdaptives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scepter Holdings position performs unexpectedly, BioAdaptives 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 BioAdaptives will offset losses from the drop in BioAdaptives' long position.| Scepter Holdings vs. Qed Connect | Scepter Holdings vs. Nates Food Co | Scepter Holdings vs. Sharing Services Global | Scepter Holdings vs. Stryve Foods |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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