Correlation Between Option Care and SCOR PK
Can any of the company-specific risk be diversified away by investing in both Option Care 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 Option Care and SCOR PK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Option Care Health and SCOR PK, you can compare the effects of market volatilities on Option Care 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 Option Care with a short position of SCOR PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Option Care and SCOR PK.
Diversification Opportunities for Option Care and SCOR PK
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Option and SCOR is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Option Care Health and SCOR PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR PK and Option Care 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 Option Care Health 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 Option Care i.e., Option Care and SCOR PK go up and down completely randomly.
Pair Corralation between Option Care and SCOR PK
Given the investment horizon of 90 days Option Care Health is expected to under-perform the SCOR PK. But the stock apears to be less risky and, when comparing its historical volatility, Option Care Health is 1.31 times less risky than SCOR PK. The stock trades about -0.01 of its potential returns per unit of risk. The SCOR PK is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 183.00 in SCOR PK on August 27, 2024 and sell it today you would earn a total of 67.00 from holding SCOR PK or generate 36.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Option Care Health vs. SCOR PK
Performance |
| Timeline |
| Option Care Health |
| SCOR PK |
Option Care and SCOR PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Option Care and SCOR PK
The main advantage of trading using opposite Option Care and SCOR PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Option Care 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.| Option Care vs. Addus HomeCare | Option Care vs. Acadia Healthcare | Option Care vs. Encompass Health Corp | Option Care vs. Select Medical Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stocks Directory Find actively traded stocks across global markets |