Correlation Between SCOR PK and SP Funds
Can any of the company-specific risk be diversified away by investing in both SCOR PK and SP Funds 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 SP Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and SP Funds Trust, you can compare the effects of market volatilities on SCOR PK and SP Funds 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 SP Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and SP Funds.
Diversification Opportunities for SCOR PK and SP Funds
Very weak diversification
The 3 months correlation between SCOR and SPTE is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and SP Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Funds Trust 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 SP Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Funds Trust has no effect on the direction of SCOR PK i.e., SCOR PK and SP Funds go up and down completely randomly.
Pair Corralation between SCOR PK and SP Funds
Assuming the 90 days horizon SCOR PK is expected to generate 2.81 times more return on investment than SP Funds. However, SCOR PK is 2.81 times more volatile than SP Funds Trust. It trades about 0.32 of its potential returns per unit of risk. SP Funds Trust is currently generating about 0.13 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOR PK vs. SP Funds Trust
Performance |
| Timeline |
| SCOR PK |
| SP Funds Trust |
SCOR PK and SP Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and SP Funds
The main advantage of trading using opposite SCOR PK and SP Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, SP Funds 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 SP Funds will offset losses from the drop in SP Funds' long position.The idea behind SCOR PK and SP Funds Trust 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.| SP Funds vs. American Beacon Select | SP Funds vs. Columbia Emerging Markets | SP Funds vs. Direxion Daily Homebuilders | SP Funds vs. Direxion Daily Cnsmr |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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