Correlation Between WICKES GROUP and ScanSource
Can any of the company-specific risk be diversified away by investing in both WICKES GROUP and ScanSource 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 WICKES GROUP and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WICKES GROUP PLC and ScanSource, you can compare the effects of market volatilities on WICKES GROUP and ScanSource 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 WICKES GROUP with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of WICKES GROUP and ScanSource.
Diversification Opportunities for WICKES GROUP and ScanSource
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WICKES and ScanSource is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding WICKES GROUP PLC and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and WICKES GROUP 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 WICKES GROUP PLC are associated (or correlated) with ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of WICKES GROUP i.e., WICKES GROUP and ScanSource go up and down completely randomly.
Pair Corralation between WICKES GROUP and ScanSource
Assuming the 90 days horizon WICKES GROUP is expected to generate 1.92 times less return on investment than ScanSource. In addition to that, WICKES GROUP is 1.03 times more volatile than ScanSource. It trades about 0.03 of its total potential returns per unit of risk. ScanSource is currently generating about 0.06 per unit of volatility. If you would invest 2,860 in ScanSource on September 4, 2024 and sell it today you would earn a total of 1,860 from holding ScanSource or generate 65.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WICKES GROUP PLC vs. ScanSource
Performance |
| Timeline |
| WICKES GROUP PLC |
| ScanSource |
WICKES GROUP and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WICKES GROUP and ScanSource
The main advantage of trading using opposite WICKES GROUP and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WICKES GROUP position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource's long position.| WICKES GROUP vs. The Home Depot | WICKES GROUP vs. The Home Depot | WICKES GROUP vs. Floor Decor Holdings | WICKES GROUP vs. LESLIES INC DL |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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