Correlation Between Simt High and SCOR PK
Can any of the company-specific risk be diversified away by investing in both Simt High and SCOR PK 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 Simt High and SCOR PK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt High Yield and SCOR PK, you can compare the effects of market volatilities on Simt High and SCOR PK 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 Simt High with a short position of SCOR PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt High and SCOR PK.
Diversification Opportunities for Simt High and SCOR PK
Poor diversification
The 3 months correlation between Simt and SCOR is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Simt High Yield and SCOR PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR PK and Simt High 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 Simt High Yield are associated (or correlated) with SCOR PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR PK has no effect on the direction of Simt High i.e., Simt High and SCOR PK go up and down completely randomly.
Pair Corralation between Simt High and SCOR PK
Assuming the 90 days horizon Simt High Yield is expected to generate 0.06 times more return on investment than SCOR PK. However, Simt High Yield is 16.18 times less risky than SCOR PK. It trades about 0.23 of its potential returns per unit of risk. SCOR PK is currently generating about 0.01 per unit of risk. If you would invest 511.00 in Simt High Yield on September 13, 2024 and sell it today you would earn a total of 32.00 from holding Simt High Yield or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt High Yield vs. SCOR PK
Performance |
| Timeline |
| Simt High Yield |
| SCOR PK |
Simt High and SCOR PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt High and SCOR PK
The main advantage of trading using opposite Simt High and SCOR PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt High position performs unexpectedly, SCOR PK 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 SCOR PK will offset losses from the drop in SCOR PK's long position.| Simt High vs. Guggenheim Managed Futures | Simt High vs. Ab Bond Inflation | Simt High vs. Blackrock Inflation Protected | Simt High vs. Arrow Managed Futures |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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