Correlation Between Scope Metals and Internet Gold

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

By analyzing existing cross correlation between Scope Metals Group and Internet Gold Golden, you can compare the effects of market volatilities on Scope Metals and Internet Gold 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 Scope Metals with a short position of Internet Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scope Metals and Internet Gold.

Diversification Opportunities for Scope Metals and Internet Gold

0.65

Correlation Coefficient

Scope Metals  Internet Gold

Poor diversification

The 3 months correlation between Scope and Internet is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Scope Metals Group and Internet Gold Golden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Gold Golden and Scope Metals 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 Scope Metals Group are associated (or correlated) with Internet Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Gold Golden has no effect on the direction of Scope Metals i.e., Scope Metals and Internet Gold go up and down completely randomly.

Pair Corralation between Scope Metals and Internet Gold

Assuming the 90 days trading horizon Scope Metals is expected to generate 1.13 times less return on investment than Internet Gold. But when comparing it to its historical volatility, Scope Metals Group is 2.45 times less risky than Internet Gold. It trades about 0.33 of its potential returns per unit of risk. Internet Gold Golden is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  36,660  in Internet Gold Golden on April 22, 2025 and sell it today you would earn a total of  13,330  from holding Internet Gold Golden or generate 36.36% return on investment over 90 days.

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

Scope Metals Group  vs.  Internet Gold Golden

Scope Metals Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Scope Metals Group are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Scope Metals sustained solid returns over the last few months and may actually be approaching a breakup point.

Internet Gold Golden

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Internet Gold Golden are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Internet Gold sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Scope Metals and Internet Gold

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

The idea behind Scope Metals Group and Internet Gold Golden 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.