Correlation Between SCOR PK and SwissCom
Can any of the company-specific risk be diversified away by investing in both SCOR PK and SwissCom 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 SwissCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and SwissCom AG, you can compare the effects of market volatilities on SCOR PK and SwissCom 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 SwissCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and SwissCom.
Diversification Opportunities for SCOR PK and SwissCom
Very good diversification
The 3 months correlation between SCOR and SwissCom is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and SwissCom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SwissCom AG 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 SwissCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SwissCom AG has no effect on the direction of SCOR PK i.e., SCOR PK and SwissCom go up and down completely randomly.
Pair Corralation between SCOR PK and SwissCom
Assuming the 90 days horizon SCOR PK is expected to under-perform the SwissCom. In addition to that, SCOR PK is 3.51 times more volatile than SwissCom AG. It trades about -0.02 of its total potential returns per unit of risk. SwissCom AG is currently generating about 0.05 per unit of volatility. If you would invest 5,393 in SwissCom AG on August 25, 2024 and sell it today you would earn a total of 305.00 from holding SwissCom AG or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOR PK vs. SwissCom AG
Performance |
| Timeline |
| SCOR PK |
| SwissCom AG |
SCOR PK and SwissCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and SwissCom
The main advantage of trading using opposite SCOR PK and SwissCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, SwissCom 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 SwissCom will offset losses from the drop in SwissCom's long position.The idea behind SCOR PK and SwissCom AG 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.| SwissCom vs. HUMANA INC | SwissCom vs. SCOR PK | SwissCom vs. Aquagold International | SwissCom vs. Barloworld Ltd ADR |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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