Correlation Between SCOTT TECHNOLOGY and Gecina SA
Can any of the company-specific risk be diversified away by investing in both SCOTT TECHNOLOGY and Gecina SA 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 Gecina SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOTT TECHNOLOGY and Gecina SA, you can compare the effects of market volatilities on SCOTT TECHNOLOGY and Gecina SA 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 Gecina SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOTT TECHNOLOGY and Gecina SA.
Diversification Opportunities for SCOTT TECHNOLOGY and Gecina SA
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCOTT and Gecina is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SCOTT TECHNOLOGY and Gecina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gecina SA 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 Gecina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gecina SA has no effect on the direction of SCOTT TECHNOLOGY i.e., SCOTT TECHNOLOGY and Gecina SA go up and down completely randomly.
Pair Corralation between SCOTT TECHNOLOGY and Gecina SA
Assuming the 90 days trading horizon SCOTT TECHNOLOGY is expected to generate 2.21 times more return on investment than Gecina SA. However, SCOTT TECHNOLOGY is 2.21 times more volatile than Gecina SA. It trades about 0.2 of its potential returns per unit of risk. Gecina SA is currently generating about -0.18 per unit of risk. If you would invest 117.00 in SCOTT TECHNOLOGY on September 3, 2024 and sell it today you would earn a total of 14.00 from holding SCOTT TECHNOLOGY or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOTT TECHNOLOGY vs. Gecina SA
Performance |
| Timeline |
| SCOTT TECHNOLOGY |
| Gecina SA |
SCOTT TECHNOLOGY and Gecina SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOTT TECHNOLOGY and Gecina SA
The main advantage of trading using opposite SCOTT TECHNOLOGY and Gecina SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOTT TECHNOLOGY position performs unexpectedly, Gecina SA 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 Gecina SA will offset losses from the drop in Gecina SA's long position.| SCOTT TECHNOLOGY vs. TOTAL GABON | SCOTT TECHNOLOGY vs. Walgreens Boots Alliance | SCOTT TECHNOLOGY vs. Peak Resources Limited |
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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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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