Correlation Between SCOR PK and Aurion Resources

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

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

Diversification Opportunities for SCOR PK and Aurion Resources

-0.16

Correlation Coefficient

SCOR PK  Aurion Resources

Good diversification

The 3 months correlation between SCOR and Aurion is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources and SCOR PK 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 PK are associated (or correlated) with Aurion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurion Resources has no effect on the direction of SCOR PK i.e., SCOR PK and Aurion Resources go up and down completely randomly.

Pair Corralation between SCOR PK and Aurion Resources

Assuming the 90 days horizon SCOR PK is expected to generate 0.86 times more return on investment than Aurion Resources. However, SCOR PK is 1.17 times less risky than Aurion Resources. It trades about 0.11 of its potential returns per unit of risk. Aurion Resources is currently generating about 0.04 per unit of risk. If you would invest  209.00  in SCOR PK on September 2, 2024 and sell it today you would earn a total of  39.00  from holding SCOR PK or generate 18.66% return on investment over 90 days.

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

SCOR PK  vs.  Aurion Resources

SCOR PK

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR PK are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SCOR PK showed solid returns over the last few months and may actually be approaching a breakup point.

Aurion Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aurion Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aurion Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with SCOR PK and Aurion Resources

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

The idea behind SCOR PK and Aurion Resources 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.