Correlation Between SCOR SE and Vergnet
Can any of the company-specific risk be diversified away by investing in both SCOR SE and Vergnet 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 Vergnet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR SE and Vergnet, you can compare the effects of market volatilities on SCOR SE and Vergnet 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 Vergnet. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR SE and Vergnet.
Diversification Opportunities for SCOR SE and Vergnet
Pay attention - limited upside
The 3 months correlation between SCOR and Vergnet is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding SCOR SE and Vergnet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vergnet 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 Vergnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vergnet has no effect on the direction of SCOR SE i.e., SCOR SE and Vergnet go up and down completely randomly.
Pair Corralation between SCOR SE and Vergnet
Assuming the 90 days trading horizon SCOR SE is expected to generate 0.28 times more return on investment than Vergnet. However, SCOR SE is 3.55 times less risky than Vergnet. It trades about 0.13 of its potential returns per unit of risk. Vergnet is currently generating about -0.44 per unit of risk. If you would invest 2,008 in SCOR SE on September 24, 2024 and sell it today you would earn a total of 354.00 from holding SCOR SE or generate 17.63% 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. Vergnet
Performance |
Timeline |
SCOR SE |
Vergnet |
SCOR SE and Vergnet Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SCOR SE and Vergnet
The main advantage of trading using opposite SCOR SE and Vergnet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR SE position performs unexpectedly, Vergnet 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 Vergnet will offset losses from the drop in Vergnet's long position.The idea behind SCOR SE and Vergnet 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |