Correlation Between Scottie Resources and Life Electric
Can any of the company-specific risk be diversified away by investing in both Scottie Resources and Life Electric 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 Scottie Resources and Life Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottie Resources Corp and Life Electric Vehicles, you can compare the effects of market volatilities on Scottie Resources and Life Electric 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 Scottie Resources with a short position of Life Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottie Resources and Life Electric.
Diversification Opportunities for Scottie Resources and Life Electric
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Scottie and Life is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Scottie Resources Corp and Life Electric Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Electric Vehicles and Scottie Resources 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 Scottie Resources Corp are associated (or correlated) with Life Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Electric Vehicles has no effect on the direction of Scottie Resources i.e., Scottie Resources and Life Electric go up and down completely randomly.
Pair Corralation between Scottie Resources and Life Electric
Assuming the 90 days horizon Scottie Resources is expected to generate 1.6 times less return on investment than Life Electric. But when comparing it to its historical volatility, Scottie Resources Corp is 1.84 times less risky than Life Electric. It trades about 0.02 of its potential returns per unit of risk. Life Electric Vehicles is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 60.00 in Life Electric Vehicles on September 2, 2024 and sell it today you would lose (35.00) from holding Life Electric Vehicles or give up 58.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scottie Resources Corp vs. Life Electric Vehicles
Performance |
| Timeline |
| Scottie Resources Corp |
| Life Electric Vehicles |
Scottie Resources and Life Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottie Resources and Life Electric
The main advantage of trading using opposite Scottie Resources and Life Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottie Resources position performs unexpectedly, Life Electric 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 Life Electric will offset losses from the drop in Life Electric's long position.| Scottie Resources vs. HUMANA INC | Scottie Resources vs. SCOR PK | Scottie Resources vs. Aquagold International | Scottie Resources vs. Thrivent High Yield |
| Life Electric vs. Volkswagen AG 110 | Life Electric vs. Stellantis NV | Life Electric vs. Toyota Motor | Life Electric vs. Honda Motor Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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