Correlation Between SCOR PK and Colas SA
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Colas SA 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 Colas SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Colas SA, you can compare the effects of market volatilities on SCOR PK and Colas SA 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 Colas SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Colas SA.
Diversification Opportunities for SCOR PK and Colas SA
Very good diversification
The 3 months correlation between SCOR and Colas is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Colas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colas SA 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 Colas SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colas SA has no effect on the direction of SCOR PK i.e., SCOR PK and Colas SA go up and down completely randomly.
Pair Corralation between SCOR PK and Colas SA
Assuming the 90 days horizon SCOR PK is expected to generate 1.75 times more return on investment than Colas SA. However, SCOR PK is 1.75 times more volatile than Colas SA. It trades about 0.04 of its potential returns per unit of risk. Colas SA is currently generating about 0.04 per unit of risk. If you would invest 182.00 in SCOR PK on August 24, 2024 and sell it today you would earn a total of 75.00 from holding SCOR PK or generate 41.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.08% |
| Values | Daily Returns |
SCOR PK vs. Colas SA
Performance |
| Timeline |
| SCOR PK |
| Colas SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SCOR PK and Colas SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Colas SA
The main advantage of trading using opposite SCOR PK and Colas SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Colas SA 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 Colas SA will offset losses from the drop in Colas SA's long position.The idea behind SCOR PK and Colas SA 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.| Colas SA vs. Reinsurance Group of | Colas SA vs. Siriuspoint | Colas SA vs. RenaissanceRe Holdings | Colas SA vs. Maiden Holdings |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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