Correlation Between Alphabet and Scout24 SE

Can any of the company-specific risk be diversified away by investing in both Alphabet and Scout24 SE 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 Alphabet and Scout24 SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alphabet and Scout24 SE, you can compare the effects of market volatilities on Alphabet and Scout24 SE 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 Alphabet with a short position of Scout24 SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Scout24 SE.

Diversification Opportunities for Alphabet and Scout24 SE

0.8

Correlation Coefficient

Alphabet  Scout24 SE

Very poor diversification

The 3 months correlation between Alphabet and Scout24 is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet and Scout24 SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout24 SE and Alphabet 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 Alphabet are associated (or correlated) with Scout24 SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout24 SE has no effect on the direction of Alphabet i.e., Alphabet and Scout24 SE go up and down completely randomly.

Pair Corralation between Alphabet and Scout24 SE

Assuming the 90 days trading horizon Alphabet is expected to generate 1.21 times less return on investment than Scout24 SE. In addition to that, Alphabet is 1.84 times more volatile than Scout24 SE. It trades about 0.12 of its total potential returns per unit of risk. Scout24 SE is currently generating about 0.28 per unit of volatility. If you would invest  9,921  in Scout24 SE on April 24, 2025 and sell it today you would earn a total of  2,099  from holding Scout24 SE or generate 21.16% return on investment over 90 days.

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

Alphabet  vs.  Scout24 SE

Alphabet

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Alphabet reported solid returns over the last few months and may actually be approaching a breakup point.

Scout24 SE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Scout24 SE are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Scout24 SE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alphabet and Scout24 SE

The main advantage of trading using opposite Alphabet and Scout24 SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, Scout24 SE 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 Scout24 SE will offset losses from the drop in Scout24 SE's long position.

The idea behind Alphabet and Scout24 SE 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.