Correlation Between SCOR PK and Global X

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

By analyzing existing cross correlation between SCOR PK and Global X E commerce, you can compare the effects of market volatilities on SCOR PK and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Global X.

Diversification Opportunities for SCOR PK and Global X

0.74

Correlation Coefficient

SCOR PK  Global X

Poor diversification

The 3 months correlation between SCOR and Global is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Global X E commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X E 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X E has no effect on the direction of SCOR PK i.e., SCOR PK and Global X go up and down completely randomly.

Pair Corralation between SCOR PK and Global X

Assuming the 90 days horizon SCOR PK is expected to generate 1.13 times less return on investment than Global X. In addition to that, SCOR PK is 2.19 times more volatile than Global X E commerce. It trades about 0.09 of its total potential returns per unit of risk. Global X E commerce is currently generating about 0.23 per unit of volatility. If you would invest  2,471  in Global X E commerce on September 17, 2024 and sell it today you would earn a total of  476.00  from holding Global X E commerce or generate 19.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

SCOR PK  vs.  Global X E commerce

SCOR PK

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR PK are ranked lower than 7 (%) 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.

Global X E

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global X E commerce are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, Global X showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SCOR PK and Global X

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

The idea behind SCOR PK and Global X E commerce 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.