Correlation Between SCOR PK and FLIY
Can any of the company-specific risk be diversified away by investing in both SCOR PK and FLIY 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 FLIY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and FLIY, you can compare the effects of market volatilities on SCOR PK and FLIY 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 FLIY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and FLIY.
Diversification Opportunities for SCOR PK and FLIY
Poor diversification
The 3 months correlation between SCOR and FLIY is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and FLIY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLIY 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 FLIY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLIY has no effect on the direction of SCOR PK i.e., SCOR PK and FLIY go up and down completely randomly.
Pair Corralation between SCOR PK and FLIY
If you would invest 2,746 in FLIY on September 3, 2024 and sell it today you would earn a total of 0.00 from holding FLIY or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.61% |
| Values | Daily Returns |
SCOR PK vs. FLIY
Performance |
| Timeline |
| SCOR PK |
| FLIY |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SCOR PK and FLIY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and FLIY
The main advantage of trading using opposite SCOR PK and FLIY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, FLIY 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 FLIY will offset losses from the drop in FLIY's long position.The idea behind SCOR PK and FLIY 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.| FLIY vs. iShares MSCI Malaysia | FLIY vs. iShares MSCI Hong | FLIY vs. iShares MSCI Australia | FLIY vs. iShares MSCI Taiwan |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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