Correlation Between SSE PLC and CIA ENGER
Can any of the company-specific risk be diversified away by investing in both SSE PLC and CIA ENGER 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 SSE PLC and CIA ENGER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSE PLC ADR and CIA ENGER ADR, you can compare the effects of market volatilities on SSE PLC and CIA ENGER 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 SSE PLC with a short position of CIA ENGER. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSE PLC and CIA ENGER.
Diversification Opportunities for SSE PLC and CIA ENGER
Very good diversification
The 3 months correlation between SSE and CIA is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SSE PLC ADR and CIA ENGER ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIA ENGER ADR and SSE PLC 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 SSE PLC ADR are associated (or correlated) with CIA ENGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIA ENGER ADR has no effect on the direction of SSE PLC i.e., SSE PLC and CIA ENGER go up and down completely randomly.
Pair Corralation between SSE PLC and CIA ENGER
Assuming the 90 days trading horizon SSE PLC ADR is expected to under-perform the CIA ENGER. In addition to that, SSE PLC is 2.03 times more volatile than CIA ENGER ADR. It trades about -0.03 of its total potential returns per unit of risk. CIA ENGER ADR is currently generating about 0.0 per unit of volatility. If you would invest 214.00 in CIA ENGER ADR on September 13, 2024 and sell it today you would earn a total of 0.00 from holding CIA ENGER ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSE PLC ADR vs. CIA ENGER ADR
Performance |
| Timeline |
| SSE PLC ADR |
| CIA ENGER ADR |
SSE PLC and CIA ENGER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSE PLC and CIA ENGER
The main advantage of trading using opposite SSE PLC and CIA ENGER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSE PLC position performs unexpectedly, CIA ENGER 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 CIA ENGER will offset losses from the drop in CIA ENGER's long position.| SSE PLC vs. Electronic Arts | SSE PLC vs. National Retail Properties | SSE PLC vs. Nucletron Electronic Aktiengesellschaft | SSE PLC vs. RETAIL FOOD GROUP |
| CIA ENGER vs. Highlight Communications AG | CIA ENGER vs. Singapore Telecommunications Limited | CIA ENGER vs. Shenandoah Telecommunications | CIA ENGER vs. BORR DRILLING NEW |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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