Correlation Between SCOTT TECHNOLOGY and KONTIGO CARE
Can any of the company-specific risk be diversified away by investing in both SCOTT TECHNOLOGY and KONTIGO CARE 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 SCOTT TECHNOLOGY and KONTIGO CARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOTT TECHNOLOGY and KONTIGO CARE AB, you can compare the effects of market volatilities on SCOTT TECHNOLOGY and KONTIGO CARE 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 SCOTT TECHNOLOGY with a short position of KONTIGO CARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOTT TECHNOLOGY and KONTIGO CARE.
Diversification Opportunities for SCOTT TECHNOLOGY and KONTIGO CARE
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between SCOTT and KONTIGO is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SCOTT TECHNOLOGY and KONTIGO CARE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KONTIGO CARE AB and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY are associated (or correlated) with KONTIGO CARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KONTIGO CARE AB has no effect on the direction of SCOTT TECHNOLOGY i.e., SCOTT TECHNOLOGY and KONTIGO CARE go up and down completely randomly.
Pair Corralation between SCOTT TECHNOLOGY and KONTIGO CARE
Assuming the 90 days trading horizon SCOTT TECHNOLOGY is expected to generate 0.33 times more return on investment than KONTIGO CARE. However, SCOTT TECHNOLOGY is 3.06 times less risky than KONTIGO CARE. It trades about 0.2 of its potential returns per unit of risk. KONTIGO CARE AB is currently generating about 0.07 per unit of risk. If you would invest 110.00 in SCOTT TECHNOLOGY on September 14, 2024 and sell it today you would earn a total of 14.00 from holding SCOTT TECHNOLOGY or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOTT TECHNOLOGY vs. KONTIGO CARE AB
Performance |
| Timeline |
| SCOTT TECHNOLOGY |
| KONTIGO CARE AB |
SCOTT TECHNOLOGY and KONTIGO CARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOTT TECHNOLOGY and KONTIGO CARE
The main advantage of trading using opposite SCOTT TECHNOLOGY and KONTIGO CARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOTT TECHNOLOGY position performs unexpectedly, KONTIGO CARE 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 KONTIGO CARE will offset losses from the drop in KONTIGO CARE's long position.| SCOTT TECHNOLOGY vs. Apple Inc | SCOTT TECHNOLOGY vs. Apple Inc | SCOTT TECHNOLOGY vs. Apple Inc | SCOTT TECHNOLOGY vs. Apple Inc |
| KONTIGO CARE vs. INTERCONT HOTELS | KONTIGO CARE vs. AECOM TECHNOLOGY | KONTIGO CARE vs. MACOM Technology Solutions | KONTIGO CARE vs. SCOTT TECHNOLOGY |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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