Correlation Between SCOR PK and Shenkman Short
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Shenkman Short 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 Shenkman Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Shenkman Short Duration, you can compare the effects of market volatilities on SCOR PK and Shenkman Short 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 Shenkman Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Shenkman Short.
Diversification Opportunities for SCOR PK and Shenkman Short
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCOR and Shenkman is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Shenkman Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenkman Short Duration 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 Shenkman Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenkman Short Duration has no effect on the direction of SCOR PK i.e., SCOR PK and Shenkman Short go up and down completely randomly.
Pair Corralation between SCOR PK and Shenkman Short
Assuming the 90 days horizon SCOR PK is expected to generate 1.17 times less return on investment than Shenkman Short. In addition to that, SCOR PK is 24.65 times more volatile than Shenkman Short Duration. It trades about 0.01 of its total potential returns per unit of risk. Shenkman Short Duration is currently generating about 0.25 per unit of volatility. If you would invest 897.00 in Shenkman Short Duration on September 12, 2024 and sell it today you would earn a total of 91.00 from holding Shenkman Short Duration or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.09% |
| Values | Daily Returns |
SCOR PK vs. Shenkman Short Duration
Performance |
| Timeline |
| SCOR PK |
| Shenkman Short Duration |
SCOR PK and Shenkman Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Shenkman Short
The main advantage of trading using opposite SCOR PK and Shenkman Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Shenkman Short 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 Shenkman Short will offset losses from the drop in Shenkman Short's long position.The idea behind SCOR PK and Shenkman Short Duration 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.| Shenkman Short vs. SCOR PK | Shenkman Short vs. Morningstar Unconstrained Allocation | Shenkman Short vs. Via Renewables | Shenkman Short vs. Bondbloxx ETF Trust |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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