Correlation Between SCOR PK and Sit Government
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Sit Government 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 Sit Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Sit Government Securities, you can compare the effects of market volatilities on SCOR PK and Sit Government 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 Sit Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Sit Government.
Diversification Opportunities for SCOR PK and Sit Government
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCOR and Sit is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Sit Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Government Securities 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 Sit Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Government Securities has no effect on the direction of SCOR PK i.e., SCOR PK and Sit Government go up and down completely randomly.
Pair Corralation between SCOR PK and Sit Government
Assuming the 90 days horizon SCOR PK is expected to generate 14.1 times more return on investment than Sit Government. However, SCOR PK is 14.1 times more volatile than Sit Government Securities. It trades about 0.32 of its potential returns per unit of risk. Sit Government Securities is currently generating about 0.19 per unit of risk. If you would invest 214.00 in SCOR PK on September 13, 2024 and sell it today you would earn a total of 42.00 from holding SCOR PK or generate 19.63% 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. Sit Government Securities
Performance |
| Timeline |
| SCOR PK |
| Sit Government Securities |
SCOR PK and Sit Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Sit Government
The main advantage of trading using opposite SCOR PK and Sit Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Sit Government 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 Sit Government will offset losses from the drop in Sit Government's long position.The idea behind SCOR PK and Sit Government Securities 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.| Sit Government vs. Sit Small Cap | Sit Government vs. Sit Global Dividend | Sit Government vs. Sit Global Dividend | Sit Government vs. Sit Small Cap |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |