Correlation Between SCOR PK and American High
Can any of the company-specific risk be diversified away by investing in both SCOR PK and American High 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 American High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and American High Income Municipal, you can compare the effects of market volatilities on SCOR PK and American High 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 American High. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and American High.
Diversification Opportunities for SCOR PK and American High
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SCOR and American is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and American High Income Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American High Income 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 American High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American High Income has no effect on the direction of SCOR PK i.e., SCOR PK and American High go up and down completely randomly.
Pair Corralation between SCOR PK and American High
Assuming the 90 days horizon SCOR PK is expected to generate 10.03 times more return on investment than American High. However, SCOR PK is 10.03 times more volatile than American High Income Municipal. It trades about 0.12 of its potential returns per unit of risk. American High Income Municipal is currently generating about 0.04 per unit of risk. If you would invest 216.00 in SCOR PK on September 13, 2024 and sell it today you would earn a total of 40.00 from holding SCOR PK or generate 18.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SCOR PK vs. American High Income Municipal
Performance |
Timeline |
SCOR PK |
American High Income |
SCOR PK and American High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SCOR PK and American High
The main advantage of trading using opposite SCOR PK and American High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, American High 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 American High will offset losses from the drop in American High's long position.The idea behind SCOR PK and American High Income Municipal 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.American High vs. Income Fund Of | American High vs. New World Fund | American High vs. American Mutual Fund | American High vs. American Mutual Fund |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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