Correlation Between Scepter Holdings and SponsorsOne

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

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

Diversification Opportunities for Scepter Holdings and SponsorsOne

0.0

Correlation Coefficient

Scepter Holdings  SponsorsOne

Pay attention - limited upside

The 3 months correlation between Scepter and SponsorsOne is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Scepter Holdings and SponsorsOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SponsorsOne and Scepter Holdings 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 Scepter Holdings are associated (or correlated) with SponsorsOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SponsorsOne has no effect on the direction of Scepter Holdings i.e., Scepter Holdings and SponsorsOne go up and down completely randomly.

Pair Corralation between Scepter Holdings and SponsorsOne

If you would invest  0.07  in Scepter Holdings on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Scepter Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Scepter Holdings  vs.  SponsorsOne

Scepter Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Scepter Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Scepter Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

SponsorsOne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SponsorsOne has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SponsorsOne is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Scepter Holdings and SponsorsOne

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

The idea behind Scepter Holdings and SponsorsOne 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.