Correlation Between Ferm Casino and SCOR SE

Can any of the company-specific risk be diversified away by investing in both Ferm Casino and SCOR SE 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 Ferm Casino and SCOR SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ferm Casino Mun and SCOR SE, you can compare the effects of market volatilities on Ferm Casino and SCOR SE 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 Ferm Casino with a short position of SCOR SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferm Casino and SCOR SE.

Diversification Opportunities for Ferm Casino and SCOR SE

-0.72

Correlation Coefficient

Ferm Casino  SCOR SE

Pay attention - limited upside

The 3 months correlation between Ferm and SCOR is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ferm Casino Mun and SCOR SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR SE and Ferm Casino 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 Ferm Casino Mun are associated (or correlated) with SCOR SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR SE has no effect on the direction of Ferm Casino i.e., Ferm Casino and SCOR SE go up and down completely randomly.

Pair Corralation between Ferm Casino and SCOR SE

Assuming the 90 days trading horizon Ferm Casino Mun is expected to under-perform the SCOR SE. But the stock apears to be less risky and, when comparing its historical volatility, Ferm Casino Mun is 2.64 times less risky than SCOR SE. The stock trades about -0.01 of its potential returns per unit of risk. The SCOR SE is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,730  in SCOR SE on February 4, 2024 and sell it today you would earn a total of  248.00  from holding SCOR SE or generate 9.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Ferm Casino Mun  vs.  SCOR SE

Ferm Casino Mun

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ferm Casino Mun has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

SCOR SE

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR SE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SCOR SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ferm Casino and SCOR SE

The main advantage of trading using opposite Ferm Casino and SCOR SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferm Casino position performs unexpectedly, SCOR SE 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 SE will offset losses from the drop in SCOR SE's long position.

The idea behind Ferm Casino Mun and SCOR SE 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.