Correlation Between SCOR SE and Biophytis

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

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

Diversification Opportunities for SCOR SE and Biophytis

-0.67

Correlation Coefficient

SCOR SE  Biophytis

Excellent diversification

The 3 months correlation between SCOR and Biophytis is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding SCOR SE and Biophytis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biophytis SA and SCOR SE 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 SE are associated (or correlated) with Biophytis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biophytis SA has no effect on the direction of SCOR SE i.e., SCOR SE and Biophytis go up and down completely randomly.

Pair Corralation between SCOR SE and Biophytis

Assuming the 90 days trading horizon SCOR SE is expected to generate 0.54 times more return on investment than Biophytis. However, SCOR SE is 1.87 times less risky than Biophytis. It trades about 0.32 of its potential returns per unit of risk. Biophytis SA is currently generating about -0.01 per unit of risk. If you would invest  1,983  in SCOR SE on August 31, 2024 and sell it today you would earn a total of  367.00  from holding SCOR SE or generate 18.51% return on investment over 90 days.

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

SCOR SE  vs.  Biophytis SA

SCOR SE

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR SE are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SCOR SE sustained solid returns over the last few months and may actually be approaching a breakup point.

Biophytis SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biophytis SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with SCOR SE and Biophytis

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

The idea behind SCOR SE and Biophytis SA 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.