# Correlation Between Maiden Holdings and SCOR PK

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Can any of the company-specific risk be diversified away by investing in both Maiden Holdings and SCOR PK 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 Maiden Holdings and SCOR PK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maiden Holdings and SCOR PK, you can compare the effects of market volatilities on Maiden Holdings and SCOR PK 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 Maiden Holdings with a short position of SCOR PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maiden Holdings and SCOR PK.

## Diversification Opportunities for Maiden Holdings and SCOR PK

 0.65 Correlation Coefficient

### Poor diversification

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

## Pair Corralation between Maiden Holdings and SCOR PK

Given the investment horizon of 90 days Maiden Holdings is expected to under-perform the SCOR PK. In addition to that, Maiden Holdings is 1.67 times more volatile than SCOR PK. It trades about -0.03 of its total potential returns per unit of risk. SCOR PK is currently generating about 0.18 per unit of volatility. If you would invest  187.00  in SCOR PK on June 12, 2024 and sell it today you would earn a total of  17.00  from holding SCOR PK or generate 9.09% return on investment over 90 days.
 Time Period 3 Months [change] Direction Moves Together Strength Significant Accuracy 100.0% Values Daily Returns

## Maiden Holdings  vs.  SCOR PK

 Performance
 Timeline
 Maiden Holdings Correlation Profile

### 0 of 100

 Weak Strong
Very Weak
Over the last 90 days Maiden Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in October 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
 Performance Backtest Predict
 SCOR PK Correlation Profile

### 0 of 100

 Weak Strong
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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in October 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
 Performance Backtest Predict

## Maiden Holdings and SCOR PK Volatility Contrast

 Predicted Return Density
 Returns

## Pair Trading with Maiden Holdings and SCOR PK

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