Correlation Between SCOR PK and Continental
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Continental 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 Continental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Continental AG PK, you can compare the effects of market volatilities on SCOR PK and Continental 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 Continental. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Continental.
Diversification Opportunities for SCOR PK and Continental
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SCOR and Continental is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Continental AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental AG PK 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 Continental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental AG PK has no effect on the direction of SCOR PK i.e., SCOR PK and Continental go up and down completely randomly.
Pair Corralation between SCOR PK and Continental
Assuming the 90 days horizon SCOR PK is expected to generate 1.38 times more return on investment than Continental. However, SCOR PK is 1.38 times more volatile than Continental AG PK. It trades about 0.03 of its potential returns per unit of risk. Continental AG PK is currently generating about 0.02 per unit of risk. If you would invest 196.00 in SCOR PK on August 30, 2024 and sell it today you would earn a total of 50.00 from holding SCOR PK or generate 25.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.39% |
| Values | Daily Returns |
SCOR PK vs. Continental AG PK
Performance |
| Timeline |
| SCOR PK |
| Continental AG PK |
SCOR PK and Continental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Continental
The main advantage of trading using opposite SCOR PK and Continental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Continental 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 Continental will offset losses from the drop in Continental's long position.The idea behind SCOR PK and Continental AG PK 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.| Continental vs. Compagnie Gnrale des | Continental vs. Bridgestone Corp ADR | Continental vs. Continental Aktiengesellschaft | Continental vs. Douglas Dynamics |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |