Correlation Between SCOR PK and Voya Midcap
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Voya Midcap 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 Voya Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Voya Midcap Opportunities, you can compare the effects of market volatilities on SCOR PK and Voya Midcap 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 Voya Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Voya Midcap.
Diversification Opportunities for SCOR PK and Voya Midcap
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SCOR and Voya is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Voya Midcap Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Midcap Opportunities 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 Voya Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Midcap Opportunities has no effect on the direction of SCOR PK i.e., SCOR PK and Voya Midcap go up and down completely randomly.
Pair Corralation between SCOR PK and Voya Midcap
Assuming the 90 days horizon SCOR PK is expected to generate 2.96 times more return on investment than Voya Midcap. However, SCOR PK is 2.96 times more volatile than Voya Midcap Opportunities. It trades about 0.03 of its potential returns per unit of risk. Voya Midcap Opportunities is currently generating about 0.09 per unit of risk. If you would invest 199.00 in SCOR PK on September 13, 2024 and sell it today you would earn a total of 55.00 from holding SCOR PK or generate 27.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.19% |
| Values | Daily Returns |
SCOR PK vs. Voya Midcap Opportunities
Performance |
| Timeline |
| SCOR PK |
| Voya Midcap Opportunities |
SCOR PK and Voya Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Voya Midcap
The main advantage of trading using opposite SCOR PK and Voya Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Voya Midcap 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 Voya Midcap will offset losses from the drop in Voya Midcap's long position.The idea behind SCOR PK and Voya Midcap Opportunities 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.| Voya Midcap vs. Aqr Long Short Equity | Voya Midcap vs. Franklin Federal Limited Term | Voya Midcap vs. Delaware Investments Ultrashort | Voya Midcap vs. Siit Ultra Short |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |