Correlation Between Senior Connect and Screaming Eagle
Can any of the company-specific risk be diversified away by investing in both Senior Connect and Screaming Eagle 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 Senior Connect and Screaming Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senior Connect Acquisition and Screaming Eagle Acquisition, you can compare the effects of market volatilities on Senior Connect and Screaming Eagle 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 Senior Connect with a short position of Screaming Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senior Connect and Screaming Eagle.
Diversification Opportunities for Senior Connect and Screaming Eagle
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Senior and Screaming is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Senior Connect Acquisition and Screaming Eagle Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Screaming Eagle Acqu and Senior Connect 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 Senior Connect Acquisition are associated (or correlated) with Screaming Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Screaming Eagle Acqu has no effect on the direction of Senior Connect i.e., Senior Connect and Screaming Eagle go up and down completely randomly.
Pair Corralation between Senior Connect and Screaming Eagle
Assuming the 90 days horizon Senior Connect Acquisition is expected to under-perform the Screaming Eagle. In addition to that, Senior Connect is 1.94 times more volatile than Screaming Eagle Acquisition. It trades about -0.08 of its total potential returns per unit of risk. Screaming Eagle Acquisition is currently generating about 0.0 per unit of volatility. If you would invest 36.00 in Screaming Eagle Acquisition on August 29, 2024 and sell it today you would lose (21.00) from holding Screaming Eagle Acquisition or give up 58.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 62.04% |
| Values | Daily Returns |
Senior Connect Acquisition vs. Screaming Eagle Acquisition
Performance |
| Timeline |
| Senior Connect Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Screaming Eagle Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Senior Connect and Screaming Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senior Connect and Screaming Eagle
The main advantage of trading using opposite Senior Connect and Screaming Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senior Connect position performs unexpectedly, Screaming Eagle 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 Screaming Eagle will offset losses from the drop in Screaming Eagle's long position.The idea behind Senior Connect Acquisition and Screaming Eagle Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Stocks Directory module to find actively traded stocks across global markets.
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