Correlation Between Apple and SCANSOURCE (SC3SG)
Can any of the company-specific risk be diversified away by investing in both Apple and SCANSOURCE (SC3SG) 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 Apple and SCANSOURCE (SC3SG) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and SCANSOURCE, you can compare the effects of market volatilities on Apple and SCANSOURCE (SC3SG) 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 Apple with a short position of SCANSOURCE (SC3SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SCANSOURCE (SC3SG).
Diversification Opportunities for Apple and SCANSOURCE (SC3SG)
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apple and SCANSOURCE is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE (SC3SG) and Apple 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 Apple Inc are associated (or correlated) with SCANSOURCE (SC3SG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANSOURCE (SC3SG) has no effect on the direction of Apple i.e., Apple and SCANSOURCE (SC3SG) go up and down completely randomly.
Pair Corralation between Apple and SCANSOURCE (SC3SG)
Assuming the 90 days trading horizon Apple is expected to generate 4.32 times less return on investment than SCANSOURCE (SC3SG). But when comparing it to its historical volatility, Apple Inc is 2.55 times less risky than SCANSOURCE (SC3SG). It trades about 0.12 of its potential returns per unit of risk. SCANSOURCE is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,220 in SCANSOURCE on August 24, 2024 and sell it today you would earn a total of 660.00 from holding SCANSOURCE or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. SCANSOURCE
Performance |
| Timeline |
| Apple Inc |
| SCANSOURCE (SC3SG) |
Apple and SCANSOURCE (SC3SG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and SCANSOURCE (SC3SG)
The main advantage of trading using opposite Apple and SCANSOURCE (SC3SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, SCANSOURCE (SC3SG) 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 (SC3SG) will offset losses from the drop in SCANSOURCE (SC3SG)'s long position.| Apple vs. FUYO GENERAL LEASE | Apple vs. United Rentals | Apple vs. Qurate Retail Series | Apple vs. National Retail Properties |
| SCANSOURCE (SC3SG) vs. Apple Inc | SCANSOURCE (SC3SG) vs. Apple Inc | SCANSOURCE (SC3SG) vs. Apple Inc | SCANSOURCE (SC3SG) vs. Apple Inc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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