Correlation Between Science In and Arcontech Group

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

By analyzing existing cross correlation between Science in Sport and Arcontech Group Plc, you can compare the effects of market volatilities on Science In and Arcontech Group 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 Science In with a short position of Arcontech Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science In and Arcontech Group.

Diversification Opportunities for Science In and Arcontech Group

0.79

Correlation Coefficient

Science In  Arcontech Group

Poor diversification

The 3 months correlation between Science and Arcontech is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Science in Sport and Arcontech Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcontech Group Plc and Science In 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 Science in Sport are associated (or correlated) with Arcontech Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcontech Group Plc has no effect on the direction of Science In i.e., Science In and Arcontech Group go up and down completely randomly.

Pair Corralation between Science In and Arcontech Group

Assuming the 90 days trading horizon Science In is expected to generate 3.08 times less return on investment than Arcontech Group. But when comparing it to its historical volatility, Science in Sport is 3.43 times less risky than Arcontech Group. It trades about 0.17 of its potential returns per unit of risk. Arcontech Group Plc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  7,700  in Arcontech Group Plc on April 21, 2025 and sell it today you would earn a total of  1,200  from holding Arcontech Group Plc or generate 15.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	61.9%
Values	Daily Returns

Science in Sport  vs.  Arcontech Group Plc

Science in Sport

Risk-Adjusted Performance

Good

Over the last 90 days Science in Sport has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Science In is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Arcontech Group Plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arcontech Group Plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Arcontech Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Science In and Arcontech Group

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

The idea behind Science in Sport and Arcontech Group Plc 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.