Correlation Between Scully Royalty and Heritage Global

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

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

Diversification Opportunities for Scully Royalty and Heritage Global

-0.52

Correlation Coefficient

Scully Royalty  Heritage Global

Excellent diversification

The 3 months correlation between Scully and Heritage is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Scully Royalty and Heritage Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Global and Scully Royalty 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 Scully Royalty are associated (or correlated) with Heritage Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Global has no effect on the direction of Scully Royalty i.e., Scully Royalty and Heritage Global go up and down completely randomly.

Pair Corralation between Scully Royalty and Heritage Global

Considering the 90-day investment horizon Scully Royalty is expected to under-perform the Heritage Global. In addition to that, Scully Royalty is 1.11 times more volatile than Heritage Global. It trades about -0.17 of its total potential returns per unit of risk. Heritage Global is currently generating about 0.07 per unit of volatility. If you would invest  199.00  in Heritage Global on May 6, 2025 and sell it today you would earn a total of  15.00  from holding Heritage Global or generate 7.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Scully Royalty  vs.  Heritage Global

Scully Royalty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scully Royalty has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Heritage Global

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Heritage Global are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, Heritage Global may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Scully Royalty and Heritage Global

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

The idea behind Scully Royalty and Heritage Global 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.