Correlation Between Scout Small and New York
Can any of the company-specific risk be diversified away by investing in both Scout Small and New York 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 Scout Small and New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scout Small Cap and New York Municipal, you can compare the effects of market volatilities on Scout Small and New York 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 Scout Small with a short position of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scout Small and New York.
Diversification Opportunities for Scout Small and New York
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Scout and New is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Scout Small Cap and New York Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Municipal and Scout Small 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 Scout Small Cap are associated (or correlated) with New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Municipal has no effect on the direction of Scout Small i.e., Scout Small and New York go up and down completely randomly.
Pair Corralation between Scout Small and New York
Assuming the 90 days horizon Scout Small Cap is expected to generate 9.13 times more return on investment than New York. However, Scout Small is 9.13 times more volatile than New York Municipal. It trades about 0.06 of its potential returns per unit of risk. New York Municipal is currently generating about 0.11 per unit of risk. If you would invest 2,441 in Scout Small Cap on September 13, 2024 and sell it today you would earn a total of 1,041 from holding Scout Small Cap or generate 42.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scout Small Cap vs. New York Municipal
Performance |
| Timeline |
| Scout Small Cap |
| New York Municipal |
Scout Small and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scout Small and New York
The main advantage of trading using opposite Scout Small and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scout Small position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Scout Small vs. Carillon Chartwell Short | Scout Small vs. Chartwell Short Duration | Scout Small vs. Carillon Chartwell Short | Scout Small vs. Eagle Growth Income |
| New York vs. Scout Small Cap | New York vs. Pace Smallmedium Value | New York vs. Old Westbury Small | New York vs. Df Dent Small |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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