Correlation Between SCOR PK and Annexon

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

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

Diversification Opportunities for SCOR PK and Annexon

0.05

Correlation Coefficient

SCOR PK  Annexon

Significant diversification

The 3 months correlation between SCOR and Annexon is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Annexon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annexon 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 Annexon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annexon has no effect on the direction of SCOR PK i.e., SCOR PK and Annexon go up and down completely randomly.

Pair Corralation between SCOR PK and Annexon

Assuming the 90 days horizon SCOR PK is expected to generate 0.48 times more return on investment than Annexon. However, SCOR PK is 2.09 times less risky than Annexon. It trades about -0.1 of its potential returns per unit of risk. Annexon is currently generating about -0.05 per unit of risk. If you would invest  313.00  in SCOR PK on March 31, 2024 and sell it today you would lose (57.00) from holding SCOR PK or give up 18.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

SCOR PK  vs.  Annexon

SCOR PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCOR PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Annexon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Annexon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SCOR PK and Annexon

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

The idea behind SCOR PK and Annexon 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.