Correlation Between SCOR PK and Mid-cap Value

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

By analyzing existing cross correlation between SCOR PK and Mid Cap Value Profund, you can compare the effects of market volatilities on SCOR PK and Mid-cap Value 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 Mid-cap Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Mid-cap Value.

Diversification Opportunities for SCOR PK and Mid-cap Value

-0.37

Correlation Coefficient

SCOR PK  Mid-cap Value

Very good diversification

The 3 months correlation between SCOR and Mid-cap is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Mid Cap Value Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Value 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 Mid-cap Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Value has no effect on the direction of SCOR PK i.e., SCOR PK and Mid-cap Value go up and down completely randomly.

Pair Corralation between SCOR PK and Mid-cap Value

Assuming the 90 days horizon SCOR PK is expected to generate 2.66 times more return on investment than Mid-cap Value. However, SCOR PK is 2.66 times more volatile than Mid Cap Value Profund. It trades about 0.06 of its potential returns per unit of risk. Mid Cap Value Profund is currently generating about 0.05 per unit of risk. If you would invest  123.00  in SCOR PK on July 7, 2024 and sell it today you would earn a total of  106.00  from holding SCOR PK or generate 86.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

SCOR PK  vs.  Mid Cap Value Profund

SCOR PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCOR PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in November 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Mid Cap Value

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap Value Profund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly fragile basic indicators, Mid-cap Value may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Pair Trading with SCOR PK and Mid-cap Value

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

The idea behind SCOR PK and Mid Cap Value Profund 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..