Correlation Between SCB X and Univentures Public

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

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

Diversification Opportunities for SCB X and Univentures Public

-0.55

Correlation Coefficient

SCB X  Univentures Public

Excellent diversification

The 3 months correlation between SCB and Univentures is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SCB X Public and Univentures Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univentures Public and SCB X 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 SCB X Public are associated (or correlated) with Univentures Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univentures Public has no effect on the direction of SCB X i.e., SCB X and Univentures Public go up and down completely randomly.

Pair Corralation between SCB X and Univentures Public

Assuming the 90 days trading horizon SCB X Public is expected to generate 0.67 times more return on investment than Univentures Public. However, SCB X Public is 1.49 times less risky than Univentures Public. It trades about 0.08 of its potential returns per unit of risk. Univentures Public is currently generating about -0.07 per unit of risk. If you would invest  9,633  in SCB X Public on September 24, 2024 and sell it today you would earn a total of  2,017  from holding SCB X Public or generate 20.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.58%
Values	Daily Returns

SCB X Public  vs.  Univentures Public

SCB X Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SCB X Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, SCB X is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Univentures Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SCB X and Univentures Public

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

The idea behind SCB X Public and Univentures Public 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.