Correlation Between SCOR PK and SPDR Portfolio

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Can any of the company-specific risk be diversified away by investing in both SCOR PK and SPDR Portfolio 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 SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and SPDR Portfolio Emerging, you can compare the effects of market volatilities on SCOR PK and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and SPDR Portfolio.

Diversification Opportunities for SCOR PK and SPDR Portfolio

-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between SCOR and SPDR is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and SPDR Portfolio Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio Emerging 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio Emerging has no effect on the direction of SCOR PK i.e., SCOR PK and SPDR Portfolio go up and down completely randomly.

Pair Corralation between SCOR PK and SPDR Portfolio

Assuming the 90 days horizon SCOR PK is expected to generate 3.25 times more return on investment than SPDR Portfolio. However, SCOR PK is 3.25 times more volatile than SPDR Portfolio Emerging. It trades about 0.29 of its potential returns per unit of risk. SPDR Portfolio Emerging is currently generating about 0.02 per unit of risk. If you would invest  220.00  in SCOR PK on September 12, 2024 and sell it today you would earn a total of  39.00  from holding SCOR PK or generate 17.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

SCOR PK  vs.  SPDR Portfolio Emerging

 Performance 
       Timeline  
SCOR PK 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SCOR PK are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SCOR PK showed solid returns over the last few months and may actually be approaching a breakup point.
SPDR Portfolio Emerging 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Portfolio Emerging are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, SPDR Portfolio is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

SCOR PK and SPDR Portfolio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SCOR PK and SPDR Portfolio

The main advantage of trading using opposite SCOR PK and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.
The idea behind SCOR PK and SPDR Portfolio Emerging 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.
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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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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