Correlation Between SCOR SE and Dow Jones
Can any of the company-specific risk be diversified away by investing in both SCOR SE and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR SE and Dow Jones Industrial, you can compare the effects of market volatilities on SCOR SE and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR SE and Dow Jones.
Diversification Opportunities for SCOR SE and Dow Jones
Poor diversification
The 3 months correlation between SCOR and Dow is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SCOR SE and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of SCOR SE i.e., SCOR SE and Dow Jones go up and down completely randomly.
Pair Corralation between SCOR SE and Dow Jones
Assuming the 90 days trading horizon SCOR SE is expected to under-perform the Dow Jones. In addition to that, SCOR SE is 3.55 times more volatile than Dow Jones Industrial. It trades about -0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of volatility. If you would invest 3,838,609 in Dow Jones Industrial on September 24, 2024 and sell it today you would earn a total of 445,417 from holding Dow Jones Industrial or generate 11.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.65% |
| Values | Daily Returns |
SCOR SE vs. Dow Jones Industrial
Performance |
| Timeline |
SCOR SE and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
SCOR SE
Pair trading matchups for SCOR SE
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with SCOR SE and Dow Jones
The main advantage of trading using opposite SCOR SE and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR SE position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| SCOR SE vs. MUENCHRUECKUNSADR 110 | SCOR SE vs. Swiss Re AG | SCOR SE vs. HANNRUECKVSE ADR 12ON | SCOR SE vs. Everest Group |
| Dow Jones vs. Teleflex Incorporated | Dow Jones vs. Sonida Senior Living | Dow Jones vs. Avadel Pharmaceuticals PLC | Dow Jones vs. Cardinal Health |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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