Correlation Between SCOR PK and Five Below
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Five Below 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 Five Below into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Five Below, you can compare the effects of market volatilities on SCOR PK and Five Below 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 Five Below. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Five Below.
Diversification Opportunities for SCOR PK and Five Below
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between SCOR and Five is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Five Below in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Below 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 Five Below. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Below has no effect on the direction of SCOR PK i.e., SCOR PK and Five Below go up and down completely randomly.
Pair Corralation between SCOR PK and Five Below
Assuming the 90 days horizon SCOR PK is expected to generate 0.91 times more return on investment than Five Below. However, SCOR PK is 1.1 times less risky than Five Below. It trades about 0.1 of its potential returns per unit of risk. Five Below is currently generating about -0.03 per unit of risk. If you would invest 251.00 in SCOR PK on November 18, 2024 and sell it today you would earn a total of 10.00 from holding SCOR PK or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOR PK vs. Five Below
Performance |
| Timeline |
| SCOR PK |
| Five Below |
SCOR PK and Five Below Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Five Below
The main advantage of trading using opposite SCOR PK and Five Below positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Five Below 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 Five Below will offset losses from the drop in Five Below's long position.The idea behind SCOR PK and Five Below 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.| Five Below vs. OReilly Automotive | Five Below vs. AutoZone | Five Below vs. Genuine Parts Co | Five Below vs. Williams Sonoma |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |