Correlation Between Global Real and Scout Small
Can any of the company-specific risk be diversified away by investing in both Global Real and Scout Small 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 Global Real and Scout Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Real Estate and Scout Small Cap, you can compare the effects of market volatilities on Global Real and Scout Small 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 Global Real with a short position of Scout Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Real and Scout Small.
Diversification Opportunities for Global Real and Scout Small
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Scout is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Global Real Estate and Scout Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout Small Cap and Global Real 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 Global Real Estate are associated (or correlated) with Scout Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout Small Cap has no effect on the direction of Global Real i.e., Global Real and Scout Small go up and down completely randomly.
Pair Corralation between Global Real and Scout Small
Assuming the 90 days horizon Global Real is expected to generate 3.43 times less return on investment than Scout Small. But when comparing it to its historical volatility, Global Real Estate is 1.68 times less risky than Scout Small. It trades about 0.07 of its potential returns per unit of risk. Scout Small Cap is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,894 in Scout Small Cap on July 20, 2025 and sell it today you would earn a total of 318.00 from holding Scout Small Cap or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Real Estate vs. Scout Small Cap
Performance |
| Timeline |
| Global Real Estate |
| Scout Small Cap |
Global Real and Scout Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Real and Scout Small
The main advantage of trading using opposite Global Real and Scout Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Real position performs unexpectedly, Scout Small 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 Scout Small will offset losses from the drop in Scout Small's long position.| Global Real vs. Alpine High Yield | Global Real vs. Pace High Yield | Global Real vs. Artisan High Income | Global Real vs. Msift High Yield |
| Scout Small vs. Short Term Government Fund | Scout Small vs. Us Government Securities | Scout Small vs. Virtus Seix Government | Scout Small vs. Ridgeworth Seix Government |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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