Correlation Between CORONGLRES CDIS101 and SCOTT TECHNOLOGY

Can any of the company-specific risk be diversified away by investing in both CORONGLRES CDIS101 and SCOTT TECHNOLOGY 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 CORONGLRES CDIS101 and SCOTT TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CORONGLRES CDIS101 and SCOTT TECHNOLOGY, you can compare the effects of market volatilities on CORONGLRES CDIS101 and SCOTT TECHNOLOGY 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 CORONGLRES CDIS101 with a short position of SCOTT TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of CORONGLRES CDIS101 and SCOTT TECHNOLOGY.

Diversification Opportunities for CORONGLRES CDIS101 and SCOTT TECHNOLOGY

-0.31

Correlation Coefficient

CORONGLRES CDIS101  SCOTT TECHNOLOGY

Very good diversification

The 3 months correlation between CORONGLRES and SCOTT is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding CORONGLRES CDIS101 and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY and CORONGLRES CDIS101 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 CORONGLRES CDIS101 are associated (or correlated) with SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of CORONGLRES CDIS101 i.e., CORONGLRES CDIS101 and SCOTT TECHNOLOGY go up and down completely randomly.

Pair Corralation between CORONGLRES CDIS101 and SCOTT TECHNOLOGY

Assuming the 90 days horizon CORONGLRES CDIS101 is expected to under-perform the SCOTT TECHNOLOGY. In addition to that, CORONGLRES CDIS101 is 1.01 times more volatile than SCOTT TECHNOLOGY. It trades about -0.21 of its total potential returns per unit of risk. SCOTT TECHNOLOGY is currently generating about 0.03 per unit of volatility. If you would invest  117.00  in SCOTT TECHNOLOGY on September 13, 2024 and sell it today you would earn a total of  4.00  from holding SCOTT TECHNOLOGY or generate 3.42% return on investment over 90 days.

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

CORONGLRES CDIS101  vs.  SCOTT TECHNOLOGY

CORONGLRES CDIS101

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CORONGLRES CDIS101 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SCOTT TECHNOLOGY

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SCOTT TECHNOLOGY are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, SCOTT TECHNOLOGY is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CORONGLRES CDIS101 and SCOTT TECHNOLOGY

The main advantage of trading using opposite CORONGLRES CDIS101 and SCOTT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CORONGLRES CDIS101 position performs unexpectedly, SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY will offset losses from the drop in SCOTT TECHNOLOGY's long position.

The idea behind CORONGLRES CDIS101 and SCOTT TECHNOLOGY 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.