Correlation Between C F and SCANSOURCE
Can any of the company-specific risk be diversified away by investing in both C F 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 C F and SCANSOURCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C F FINL and SCANSOURCE, you can compare the effects of market volatilities on C F 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 C F with a short position of SCANSOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of C F and SCANSOURCE.
Diversification Opportunities for C F and SCANSOURCE
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CFF and SCANSOURCE is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding C F FINL and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE and C F 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 C F FINL 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 C F i.e., C F and SCANSOURCE go up and down completely randomly.
Pair Corralation between C F and SCANSOURCE
Assuming the 90 days horizon C F is expected to generate 1.41 times less return on investment than SCANSOURCE. In addition to that, C F is 1.21 times more volatile than SCANSOURCE. It trades about 0.04 of its total potential returns per unit of risk. SCANSOURCE is currently generating about 0.06 per unit of volatility. If you would invest 2,740 in SCANSOURCE on September 12, 2024 and sell it today you would earn a total of 2,140 from holding SCANSOURCE or generate 78.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
C F FINL vs. SCANSOURCE
Performance |
| Timeline |
| C F FINL |
| SCANSOURCE |
C F and SCANSOURCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C F and SCANSOURCE
The main advantage of trading using opposite C F and SCANSOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C F 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.| C F vs. POSBO UNSPADRS20YC1 | C F vs. Postal Savings Bank | C F vs. UTD OV BK LOC ADR1 | C F vs. Superior Plus Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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