Correlation Between Plastic Omnium and SCANDINAVCHEMOTECH
Can any of the company-specific risk be diversified away by investing in both Plastic Omnium and SCANDINAVCHEMOTECH 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 Plastic Omnium and SCANDINAVCHEMOTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastic Omnium and SCANDINAVCHEMOTECH CLB, you can compare the effects of market volatilities on Plastic Omnium and SCANDINAVCHEMOTECH 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 Plastic Omnium with a short position of SCANDINAVCHEMOTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Omnium and SCANDINAVCHEMOTECH.
Diversification Opportunities for Plastic Omnium and SCANDINAVCHEMOTECH
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Plastic and SCANDINAVCHEMOTECH is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Omnium and SCANDINAVCHEMOTECH CLB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDINAVCHEMOTECH CLB and Plastic Omnium 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 Plastic Omnium are associated (or correlated) with SCANDINAVCHEMOTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDINAVCHEMOTECH CLB has no effect on the direction of Plastic Omnium i.e., Plastic Omnium and SCANDINAVCHEMOTECH go up and down completely randomly.
Pair Corralation between Plastic Omnium and SCANDINAVCHEMOTECH
Assuming the 90 days trading horizon Plastic Omnium is expected to generate 3.45 times less return on investment than SCANDINAVCHEMOTECH. But when comparing it to its historical volatility, Plastic Omnium is 6.99 times less risky than SCANDINAVCHEMOTECH. It trades about 0.2 of its potential returns per unit of risk. SCANDINAVCHEMOTECH CLB is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 10.00 in SCANDINAVCHEMOTECH CLB on April 24, 2025 and sell it today you would earn a total of 3.00 from holding SCANDINAVCHEMOTECH CLB or generate 30.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Plastic Omnium vs. SCANDINAVCHEMOTECH CLB
Performance |
Timeline |
Plastic Omnium |
SCANDINAVCHEMOTECH CLB |
Plastic Omnium and SCANDINAVCHEMOTECH Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Plastic Omnium and SCANDINAVCHEMOTECH
The main advantage of trading using opposite Plastic Omnium and SCANDINAVCHEMOTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastic Omnium position performs unexpectedly, SCANDINAVCHEMOTECH 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 SCANDINAVCHEMOTECH will offset losses from the drop in SCANDINAVCHEMOTECH's long position.Plastic Omnium vs. AEON STORES | Plastic Omnium vs. TRAINLINE PLC LS | Plastic Omnium vs. KAUFMAN ET BROAD | Plastic Omnium vs. NTG Nordic Transport |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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