Correlation Between New Ulm and SCOR PK
Can any of the company-specific risk be diversified away by investing in both New Ulm 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 New Ulm and SCOR PK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Ulm Telecom and SCOR PK, you can compare the effects of market volatilities on New Ulm 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 New Ulm with a short position of SCOR PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Ulm and SCOR PK.
Diversification Opportunities for New Ulm and SCOR PK
Weak diversification
The 3 months correlation between New and SCOR is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding New Ulm Telecom and SCOR PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR PK and New Ulm 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 New Ulm Telecom 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 New Ulm i.e., New Ulm and SCOR PK go up and down completely randomly.
Pair Corralation between New Ulm and SCOR PK
Given the investment horizon of 90 days New Ulm Telecom is expected to under-perform the SCOR PK. In addition to that, New Ulm is 1.02 times more volatile than SCOR PK. It trades about -0.03 of its total potential returns per unit of risk. SCOR PK is currently generating about 0.03 per unit of volatility. 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 | Very Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
New Ulm Telecom vs. SCOR PK
Performance |
| Timeline |
| New Ulm Telecom |
| SCOR PK |
New Ulm and SCOR PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Ulm and SCOR PK
The main advantage of trading using opposite New Ulm and SCOR PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Ulm 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.| New Ulm vs. KORE Group Holdings | New Ulm vs. Grupo Televisa SAB | New Ulm vs. ATT Inc | New Ulm vs. Verizon Communications |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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