Correlation Between SCOR PK and Granite Falls
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Granite Falls 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 Granite Falls into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Granite Falls Energy, you can compare the effects of market volatilities on SCOR PK and Granite Falls 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 Granite Falls. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Granite Falls.
Diversification Opportunities for SCOR PK and Granite Falls
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SCOR and Granite is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Granite Falls Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Falls Energy 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 Granite Falls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Falls Energy has no effect on the direction of SCOR PK i.e., SCOR PK and Granite Falls go up and down completely randomly.
Pair Corralation between SCOR PK and Granite Falls
Assuming the 90 days horizon SCOR PK is expected to generate 6.02 times more return on investment than Granite Falls. However, SCOR PK is 6.02 times more volatile than Granite Falls Energy. It trades about 0.12 of its potential returns per unit of risk. Granite Falls Energy is currently generating about 0.13 per unit of risk. If you would invest 216.00 in SCOR PK on September 12, 2024 and sell it today you would earn a total of 43.00 from holding SCOR PK or generate 19.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOR PK vs. Granite Falls Energy
Performance |
| Timeline |
| SCOR PK |
| Granite Falls Energy |
SCOR PK and Granite Falls Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Granite Falls
The main advantage of trading using opposite SCOR PK and Granite Falls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Granite Falls 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 Granite Falls will offset losses from the drop in Granite Falls' long position.The idea behind SCOR PK and Granite Falls Energy 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.| Granite Falls vs. Cedar Realty Trust | Granite Falls vs. Spyre Therapeutics | Granite Falls vs. Coupang LLC | Granite Falls vs. Apogee Therapeutics, Common |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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