Correlation Between SCOR PK and SPACE

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

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

Diversification Opportunities for SCOR PK and SPACE

0.63

Correlation Coefficient

SCOR PK  SPACE

Poor diversification

The 3 months correlation between SCOR and SPACE is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE and SCOR PK 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 PK are associated (or correlated) with SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of SCOR PK i.e., SCOR PK and SPACE go up and down completely randomly.

Pair Corralation between SCOR PK and SPACE

Assuming the 90 days horizon SCOR PK is expected to generate 0.58 times more return on investment than SPACE. However, SCOR PK is 1.73 times less risky than SPACE. It trades about -0.02 of its potential returns per unit of risk. SPACE is currently generating about -0.19 per unit of risk. If you would invest  334.00  in SCOR PK on February 4, 2024 and sell it today you would lose (9.00) from holding SCOR PK or give up 2.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

SCOR PK  vs.  SPACE

SCOR PK

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR PK are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, SCOR PK may actually be approaching a critical reversion point that can send shares even higher in June 2024.

SPACE

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPACE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, SPACE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SCOR PK and SPACE

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

The idea behind SCOR PK and SPACE 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.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.