Correlation Between SCG PACKAGING and Warrix Sport
Can any of the company-specific risk be diversified away by investing in both SCG PACKAGING and Warrix Sport 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 SCG PACKAGING and Warrix Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCG PACKAGING PCL NVDR and Warrix Sport PCL, you can compare the effects of market volatilities on SCG PACKAGING and Warrix Sport 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 SCG PACKAGING with a short position of Warrix Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCG PACKAGING and Warrix Sport.
Diversification Opportunities for SCG PACKAGING and Warrix Sport
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SCG and Warrix is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SCG PACKAGING PCL NVDR and Warrix Sport PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warrix Sport PCL and SCG PACKAGING 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 SCG PACKAGING PCL NVDR are associated (or correlated) with Warrix Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warrix Sport PCL has no effect on the direction of SCG PACKAGING i.e., SCG PACKAGING and Warrix Sport go up and down completely randomly.
Pair Corralation between SCG PACKAGING and Warrix Sport
Assuming the 90 days trading horizon SCG PACKAGING PCL NVDR is expected to under-perform the Warrix Sport. But the stock apears to be less risky and, when comparing its historical volatility, SCG PACKAGING PCL NVDR is 1.31 times less risky than Warrix Sport. The stock trades about -0.1 of its potential returns per unit of risk. The Warrix Sport PCL is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,090 in Warrix Sport PCL on November 28, 2024 and sell it today you would lose (706.00) from holding Warrix Sport PCL or give up 64.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
SCG PACKAGING PCL NVDR vs. Warrix Sport PCL
Performance |
| Timeline |
| SCG PACKAGING PCL |
| Warrix Sport PCL |
SCG PACKAGING and Warrix Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCG PACKAGING and Warrix Sport
The main advantage of trading using opposite SCG PACKAGING and Warrix Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCG PACKAGING position performs unexpectedly, Warrix Sport 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 Warrix Sport will offset losses from the drop in Warrix Sport's long position.| SCG PACKAGING vs. Digital Telecommunications Infrastructure | SCG PACKAGING vs. Prime Office Leasehold | SCG PACKAGING vs. CPN Retail Growth | SCG PACKAGING vs. Dynasty Ceramic Public |
| Warrix Sport vs. SG Capital PCL | Warrix Sport vs. Bound and Beyond | Warrix Sport vs. Yggdrazil Group Public | Warrix Sport vs. Yong Concrete PCL |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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