Correlation Between SCOR PK and Horizon Us
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Horizon Us 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 Horizon Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Horizon Defensive Equity, you can compare the effects of market volatilities on SCOR PK and Horizon Us 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 Horizon Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Horizon Us.
Diversification Opportunities for SCOR PK and Horizon Us
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCOR and Horizon is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Horizon Defensive Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Defensive Equity 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 Horizon Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Defensive Equity has no effect on the direction of SCOR PK i.e., SCOR PK and Horizon Us go up and down completely randomly.
Pair Corralation between SCOR PK and Horizon Us
Assuming the 90 days horizon SCOR PK is expected to generate 4.53 times more return on investment than Horizon Us. However, SCOR PK is 4.53 times more volatile than Horizon Defensive Equity. It trades about 0.2 of its potential returns per unit of risk. Horizon Defensive Equity is currently generating about 0.18 per unit of risk. If you would invest 221.00 in SCOR PK on August 28, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOR PK vs. Horizon Defensive Equity
Performance |
| Timeline |
| SCOR PK |
| Horizon Defensive Equity |
SCOR PK and Horizon Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Horizon Us
The main advantage of trading using opposite SCOR PK and Horizon Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Horizon Us 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 Horizon Us will offset losses from the drop in Horizon Us' long position.The idea behind SCOR PK and Horizon Defensive Equity 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.| Horizon Us vs. Horizon Active Risk | Horizon Us vs. Horizon Active Risk | Horizon Us vs. Horizon Active Asset | Horizon Us vs. Horizon Active Dividend |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |