Correlation Between BlackRock AAA and SCOR PK
Can any of the company-specific risk be diversified away by investing in both BlackRock AAA and SCOR PK 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 BlackRock AAA and SCOR PK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock AAA CLO and SCOR PK, you can compare the effects of market volatilities on BlackRock AAA and SCOR PK 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 BlackRock AAA with a short position of SCOR PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock AAA and SCOR PK.
Diversification Opportunities for BlackRock AAA and SCOR PK
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BlackRock and SCOR is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock AAA CLO and SCOR PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR PK and BlackRock AAA 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 BlackRock AAA CLO are associated (or correlated) with SCOR PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR PK has no effect on the direction of BlackRock AAA i.e., BlackRock AAA and SCOR PK go up and down completely randomly.
Pair Corralation between BlackRock AAA and SCOR PK
Given the investment horizon of 90 days BlackRock AAA is expected to generate 2.79 times less return on investment than SCOR PK. But when comparing it to its historical volatility, BlackRock AAA CLO is 39.19 times less risky than SCOR PK. It trades about 0.4 of its potential returns per unit of risk. SCOR PK is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 204.00 in SCOR PK on September 3, 2024 and sell it today you would earn a total of 44.00 from holding SCOR PK or generate 21.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.54% |
| Values | Daily Returns |
BlackRock AAA CLO vs. SCOR PK
Performance |
| Timeline |
| BlackRock AAA CLO |
| SCOR PK |
BlackRock AAA and SCOR PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock AAA and SCOR PK
The main advantage of trading using opposite BlackRock AAA and SCOR PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock AAA position performs unexpectedly, SCOR PK 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 SCOR PK will offset losses from the drop in SCOR PK's long position.| BlackRock AAA vs. SCOR PK | BlackRock AAA vs. HUMANA INC | BlackRock AAA vs. Aquagold International | BlackRock AAA vs. Barloworld Ltd ADR |
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 CEOs Directory module to screen CEOs from public companies around the world.
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