Correlation Between Scope Metals and C Mer
Can any of the company-specific risk be diversified away by investing in both Scope Metals and C Mer 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 Scope Metals and C Mer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scope Metals Group and C Mer Industries, you can compare the effects of market volatilities on Scope Metals and C Mer 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 Scope Metals with a short position of C Mer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scope Metals and C Mer.
Diversification Opportunities for Scope Metals and C Mer
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scope and CMER is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Scope Metals Group and C Mer Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Mer Industries and Scope Metals 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 Scope Metals Group are associated (or correlated) with C Mer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Mer Industries has no effect on the direction of Scope Metals i.e., Scope Metals and C Mer go up and down completely randomly.
Pair Corralation between Scope Metals and C Mer
Assuming the 90 days trading horizon Scope Metals Group is expected to generate 0.59 times more return on investment than C Mer. However, Scope Metals Group is 1.68 times less risky than C Mer. It trades about 0.47 of its potential returns per unit of risk. C Mer Industries is currently generating about -0.09 per unit of risk. If you would invest 1,120,000 in Scope Metals Group on September 3, 2024 and sell it today you would earn a total of 257,000 from holding Scope Metals Group or generate 22.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scope Metals Group vs. C Mer Industries
Performance |
| Timeline |
| Scope Metals Group |
| C Mer Industries |
Scope Metals and C Mer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scope Metals and C Mer
The main advantage of trading using opposite Scope Metals and C Mer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scope Metals position performs unexpectedly, C Mer 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 C Mer will offset losses from the drop in C Mer's long position.| Scope Metals vs. Delek Automotive Systems | Scope Metals vs. Kerur Holdings | Scope Metals vs. Neto ME Holdings | Scope Metals vs. Bank Leumi Le Israel |
| C Mer vs. Rimon Consulting Management | C Mer vs. Sofwave Medical | C Mer vs. B Communications | C Mer vs. Scope Metals Group |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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