Correlation Between SCOR PK and Sodexo PK
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Sodexo PK 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 Sodexo PK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Sodexo PK, you can compare the effects of market volatilities on SCOR PK and Sodexo PK 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 Sodexo PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Sodexo PK.
Diversification Opportunities for SCOR PK and Sodexo PK
Very good diversification
The 3 months correlation between SCOR and Sodexo is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Sodexo PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sodexo PK 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 Sodexo PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sodexo PK has no effect on the direction of SCOR PK i.e., SCOR PK and Sodexo PK go up and down completely randomly.
Pair Corralation between SCOR PK and Sodexo PK
Assuming the 90 days horizon SCOR PK is expected to generate 2.64 times more return on investment than Sodexo PK. However, SCOR PK is 2.64 times more volatile than Sodexo PK. It trades about 0.2 of its potential returns per unit of risk. Sodexo PK is currently generating about -0.16 per unit of risk. If you would invest 221.00 in SCOR PK on August 29, 2024 and sell it today you would earn a total of 29.00 from holding SCOR PK or generate 13.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOR PK vs. Sodexo PK
Performance |
| Timeline |
| SCOR PK |
| Sodexo PK |
SCOR PK and Sodexo PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Sodexo PK
The main advantage of trading using opposite SCOR PK and Sodexo PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Sodexo PK 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 Sodexo PK will offset losses from the drop in Sodexo PK's long position.| SCOR PK vs. Invesco High Income | SCOR PK vs. Blackrock Muniholdings Ny | SCOR PK vs. MFS Investment Grade | SCOR PK vs. Federated Premier Municipal |
| Sodexo PK vs. FitLife Brands, Common | Sodexo PK vs. HUMANA INC | Sodexo PK vs. SCOR PK | Sodexo PK vs. Aquagold International |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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