Correlation Between SCOR PK and Amer Beacon
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Amer Beacon 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 SCOR PK and Amer Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Amer Beacon Ark, you can compare the effects of market volatilities on SCOR PK and Amer Beacon 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 SCOR PK with a short position of Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Amer Beacon.
Diversification Opportunities for SCOR PK and Amer Beacon
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCOR and Amer is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Amer Beacon Ark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Ark and SCOR PK 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 SCOR PK are associated (or correlated) with Amer Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Beacon Ark has no effect on the direction of SCOR PK i.e., SCOR PK and Amer Beacon go up and down completely randomly.
Pair Corralation between SCOR PK and Amer Beacon
Assuming the 90 days horizon SCOR PK is expected to generate 1.55 times less return on investment than Amer Beacon. In addition to that, SCOR PK is 1.28 times more volatile than Amer Beacon Ark. It trades about 0.03 of its total potential returns per unit of risk. Amer Beacon Ark is currently generating about 0.07 per unit of volatility. If you would invest 859.00 in Amer Beacon Ark on September 12, 2024 and sell it today you would earn a total of 794.00 from holding Amer Beacon Ark or generate 92.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.39% |
| Values | Daily Returns |
SCOR PK vs. Amer Beacon Ark
Performance |
| Timeline |
| SCOR PK |
| Amer Beacon Ark |
SCOR PK and Amer Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Amer Beacon
The main advantage of trading using opposite SCOR PK and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Amer Beacon 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 Amer Beacon will offset losses from the drop in Amer Beacon's long position.The idea behind SCOR PK and Amer Beacon Ark pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Amer Beacon vs. T Rowe Price | Amer Beacon vs. T Rowe Price | Amer Beacon vs. SCOR PK | Amer Beacon vs. Morningstar Unconstrained Allocation |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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