Correlation Between SCOR PK and ProShares Global
Can any of the company-specific risk be diversified away by investing in both SCOR PK and ProShares Global 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 ProShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and ProShares Global Listed, you can compare the effects of market volatilities on SCOR PK and ProShares Global 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 ProShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and ProShares Global.
Diversification Opportunities for SCOR PK and ProShares Global
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCOR and ProShares is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and ProShares Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Global Listed 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 ProShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Global Listed has no effect on the direction of SCOR PK i.e., SCOR PK and ProShares Global go up and down completely randomly.
Pair Corralation between SCOR PK and ProShares Global
Assuming the 90 days horizon SCOR PK is expected to generate 5.0 times more return on investment than ProShares Global. However, SCOR PK is 5.0 times more volatile than ProShares Global Listed. It trades about 0.26 of its potential returns per unit of risk. ProShares Global Listed is currently generating about 0.12 per unit of risk. If you would invest 220.00 in SCOR PK on September 12, 2024 and sell it today you would earn a total of 36.00 from holding SCOR PK or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SCOR PK vs. ProShares Global Listed
Performance |
| Timeline |
| SCOR PK |
| ProShares Global Listed |
SCOR PK and ProShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and ProShares Global
The main advantage of trading using opposite SCOR PK and ProShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, ProShares Global 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 ProShares Global will offset losses from the drop in ProShares Global's long position.The idea behind SCOR PK and ProShares Global Listed 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.| ProShares Global vs. Invesco Global Listed | ProShares Global vs. SCOR PK | ProShares Global vs. Morningstar Unconstrained Allocation | ProShares Global vs. Thrivent High Yield |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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