Correlation Between SCOR SE and Greenlight Capital

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

By analyzing existing cross correlation between SCOR SE and Greenlight Capital Re, you can compare the effects of market volatilities on SCOR SE and Greenlight Capital 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 Greenlight Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR SE and Greenlight Capital.

Diversification Opportunities for SCOR SE and Greenlight Capital

0.53

Correlation Coefficient

SCOR SE  Greenlight Capital

Very weak diversification

The 3 months correlation between SCOR and Greenlight is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SCOR SE and Greenlight Capital Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlight Capital 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 Greenlight Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlight Capital has no effect on the direction of SCOR SE i.e., SCOR SE and Greenlight Capital go up and down completely randomly.

Pair Corralation between SCOR SE and Greenlight Capital

If you would invest  2,340  in SCOR SE on September 19, 2024 and sell it today you would earn a total of  0.00  from holding SCOR SE or generate 0.0% return on investment over 90 days.

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

SCOR SE  vs.  Greenlight Capital Re

SCOR SE

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR SE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, SCOR SE may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Greenlight Capital

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Greenlight Capital Re are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Greenlight Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SCOR SE and Greenlight Capital

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

The idea behind SCOR SE and Greenlight Capital Re 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.