Correlation Between SPORT LISBOA and SCOR SE
Can any of the company-specific risk be diversified away by investing in both SPORT LISBOA and SCOR SE 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 SPORT LISBOA and SCOR SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORT LISBOA E and SCOR SE, you can compare the effects of market volatilities on SPORT LISBOA and SCOR SE 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 SPORT LISBOA with a short position of SCOR SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORT LISBOA and SCOR SE.
Diversification Opportunities for SPORT LISBOA and SCOR SE
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SPORT and SCOR is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding SPORT LISBOA E and SCOR SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR SE and SPORT LISBOA 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 SPORT LISBOA E are associated (or correlated) with SCOR SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR SE has no effect on the direction of SPORT LISBOA i.e., SPORT LISBOA and SCOR SE go up and down completely randomly.
Pair Corralation between SPORT LISBOA and SCOR SE
Assuming the 90 days horizon SPORT LISBOA E is expected to under-perform the SCOR SE. In addition to that, SPORT LISBOA is 1.59 times more volatile than SCOR SE. It trades about -0.06 of its total potential returns per unit of risk. SCOR SE is currently generating about -0.09 per unit of volatility. If you would invest 2,382 in SCOR SE on September 23, 2024 and sell it today you would lose (72.00) from holding SCOR SE or give up 3.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORT LISBOA E vs. SCOR SE
Performance |
| Timeline |
| SPORT LISBOA E |
| SCOR SE |
SPORT LISBOA and SCOR SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORT LISBOA and SCOR SE
The main advantage of trading using opposite SPORT LISBOA and SCOR SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORT LISBOA position performs unexpectedly, SCOR SE 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 SE will offset losses from the drop in SCOR SE's long position.| SPORT LISBOA vs. The Walt Disney | SPORT LISBOA vs. The Walt Disney | SPORT LISBOA vs. Charter Communications | SPORT LISBOA vs. Warner Music Group |
| SCOR SE vs. Titan Machinery | SCOR SE vs. Australian Agricultural | SCOR SE vs. Sumitomo Mitsui Construction | SCOR SE vs. SPORT LISBOA E |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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