Correlation Between Scottish American and Abingdon Health
Can any of the company-specific risk be diversified away by investing in both Scottish American and Abingdon Health 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 Scottish American and Abingdon Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottish American Investment and Abingdon Health Plc, you can compare the effects of market volatilities on Scottish American and Abingdon Health 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 Scottish American with a short position of Abingdon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish American and Abingdon Health.
Diversification Opportunities for Scottish American and Abingdon Health
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scottish and Abingdon is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Scottish American Investment and Abingdon Health Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abingdon Health Plc and Scottish American 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 Scottish American Investment are associated (or correlated) with Abingdon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abingdon Health Plc has no effect on the direction of Scottish American i.e., Scottish American and Abingdon Health go up and down completely randomly.
Pair Corralation between Scottish American and Abingdon Health
Assuming the 90 days trading horizon Scottish American Investment is expected to generate 0.41 times more return on investment than Abingdon Health. However, Scottish American Investment is 2.42 times less risky than Abingdon Health. It trades about 0.01 of its potential returns per unit of risk. Abingdon Health Plc is currently generating about -0.12 per unit of risk. If you would invest 50,671 in Scottish American Investment on September 3, 2024 and sell it today you would earn a total of 429.00 from holding Scottish American Investment or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scottish American Investment vs. Abingdon Health Plc
Performance |
| Timeline |
| Scottish American |
| Abingdon Health Plc |
Scottish American and Abingdon Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottish American and Abingdon Health
The main advantage of trading using opposite Scottish American and Abingdon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottish American position performs unexpectedly, Abingdon Health 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 Abingdon Health will offset losses from the drop in Abingdon Health's long position.| Scottish American vs. Beeks Trading | Scottish American vs. Arrow Electronics | Scottish American vs. The Investment | Scottish American vs. Kinnevik Investment AB |
| Abingdon Health vs. CleanTech Lithium plc | Abingdon Health vs. GoldMining | Abingdon Health vs. Panther Metals PLC | Abingdon Health vs. GreenX Metals |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |