Correlation Between SCOR SE and COFACE SA
Can any of the company-specific risk be diversified away by investing in both SCOR SE and COFACE SA 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 SE and COFACE SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR SE and COFACE SA, you can compare the effects of market volatilities on SCOR SE and COFACE SA 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 SE with a short position of COFACE SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR SE and COFACE SA.
Diversification Opportunities for SCOR SE and COFACE SA
Very good diversification
The 3 months correlation between SCOR and COFACE is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding SCOR SE and COFACE SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFACE SA and SCOR SE 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 SE are associated (or correlated) with COFACE SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFACE SA has no effect on the direction of SCOR SE i.e., SCOR SE and COFACE SA go up and down completely randomly.
Pair Corralation between SCOR SE and COFACE SA
Assuming the 90 days trading horizon SCOR SE is expected to generate 1.68 times more return on investment than COFACE SA. However, SCOR SE is 1.68 times more volatile than COFACE SA. It trades about 0.15 of its potential returns per unit of risk. COFACE SA is currently generating about -0.16 per unit of risk. If you would invest 2,014 in SCOR SE on September 23, 2024 and sell it today you would earn a total of 296.00 from holding SCOR SE or generate 14.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOR SE vs. COFACE SA
Performance |
| Timeline |
| SCOR SE |
| COFACE SA |
SCOR SE and COFACE SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR SE and COFACE SA
The main advantage of trading using opposite SCOR SE and COFACE SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR SE position performs unexpectedly, COFACE SA 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 COFACE SA will offset losses from the drop in COFACE SA's long position.| SCOR SE vs. Titan Machinery | SCOR SE vs. Australian Agricultural | SCOR SE vs. Sumitomo Mitsui Construction | SCOR SE vs. SPORT LISBOA E |
| COFACE SA vs. MUENCHRUECKUNSADR 110 | COFACE SA vs. Swiss Re AG | COFACE SA vs. HANNRUECKVSE ADR 12ON | COFACE SA vs. Everest Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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