Correlation Between SCOR PK and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Barings Emerging 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 Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Barings Emerging Markets, you can compare the effects of market volatilities on SCOR PK and Barings Emerging 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 Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Barings Emerging.
Diversification Opportunities for SCOR PK and Barings Emerging
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCOR and Barings is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets 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 Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of SCOR PK i.e., SCOR PK and Barings Emerging go up and down completely randomly.
Pair Corralation between SCOR PK and Barings Emerging
Assuming the 90 days horizon SCOR PK is expected to generate 11.7 times more return on investment than Barings Emerging. However, SCOR PK is 11.7 times more volatile than Barings Emerging Markets. It trades about 0.29 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about -0.08 per unit of risk. If you would invest 220.00 in SCOR PK on September 12, 2024 and sell it today you would earn a total of 39.00 from holding SCOR PK or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOR PK vs. Barings Emerging Markets
Performance |
| Timeline |
| SCOR PK |
| Barings Emerging Markets |
SCOR PK and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Barings Emerging
The main advantage of trading using opposite SCOR PK and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Barings Emerging 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 Barings Emerging will offset losses from the drop in Barings Emerging's long position.The idea behind SCOR PK and Barings Emerging Markets 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.| Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. SCOR PK |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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