Correlation Between Chongqing Machinery and SCANSOURCE (SC3SG)
Can any of the company-specific risk be diversified away by investing in both Chongqing Machinery 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 Chongqing Machinery and SCANSOURCE (SC3SG) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chongqing Machinery Electric and SCANSOURCE, you can compare the effects of market volatilities on Chongqing Machinery 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 Chongqing Machinery with a short position of SCANSOURCE (SC3SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Machinery and SCANSOURCE (SC3SG).
Diversification Opportunities for Chongqing Machinery and SCANSOURCE (SC3SG)
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chongqing and SCANSOURCE is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Machinery Electric and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE (SC3SG) and Chongqing Machinery 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 Chongqing Machinery Electric 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 Chongqing Machinery i.e., Chongqing Machinery and SCANSOURCE (SC3SG) go up and down completely randomly.
Pair Corralation between Chongqing Machinery and SCANSOURCE (SC3SG)
Assuming the 90 days horizon Chongqing Machinery Electric is expected to generate 4.41 times more return on investment than SCANSOURCE (SC3SG). However, Chongqing Machinery is 4.41 times more volatile than SCANSOURCE. It trades about 0.09 of its potential returns per unit of risk. SCANSOURCE is currently generating about -0.11 per unit of risk. If you would invest 7.70 in Chongqing Machinery Electric on October 17, 2024 and sell it today you would earn a total of 0.60 from holding Chongqing Machinery Electric or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Machinery Electric vs. SCANSOURCE
Performance |
| Timeline |
| Chongqing Machinery |
| SCANSOURCE (SC3SG) |
Chongqing Machinery and SCANSOURCE (SC3SG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Machinery and SCANSOURCE (SC3SG)
The main advantage of trading using opposite Chongqing Machinery and SCANSOURCE (SC3SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Machinery 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.| Chongqing Machinery vs. DeVry Education Group | Chongqing Machinery vs. INSURANCE AUST GRP | Chongqing Machinery vs. American Public Education | Chongqing Machinery vs. G8 EDUCATION |
| SCANSOURCE (SC3SG) vs. GALENA MINING LTD | SCANSOURCE (SC3SG) vs. Easy Software AG | SCANSOURCE (SC3SG) vs. Jacquet Metal Service | SCANSOURCE (SC3SG) vs. ADRIATIC METALS LS 013355 |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |