Correlation Between DICKS Sporting and ScanSource
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting 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 DICKS Sporting and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DICKS Sporting Goods and ScanSource, you can compare the effects of market volatilities on DICKS Sporting 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 DICKS Sporting with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and ScanSource.
Diversification Opportunities for DICKS Sporting and ScanSource
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DICKS and ScanSource is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and DICKS Sporting 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 DICKS Sporting Goods 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 DICKS Sporting i.e., DICKS Sporting and ScanSource go up and down completely randomly.
Pair Corralation between DICKS Sporting and ScanSource
Assuming the 90 days horizon DICKS Sporting is expected to generate 1.08 times less return on investment than ScanSource. But when comparing it to its historical volatility, DICKS Sporting Goods is 1.01 times less risky than ScanSource. It trades about 0.04 of its potential returns per unit of risk. ScanSource is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,620 in ScanSource on August 29, 2024 and sell it today you would earn a total of 240.00 from holding ScanSource or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
DICKS Sporting Goods vs. ScanSource
Performance |
| Timeline |
| DICKS Sporting Goods |
| ScanSource |
DICKS Sporting and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKS Sporting and ScanSource
The main advantage of trading using opposite DICKS Sporting and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting 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.| DICKS Sporting vs. KIMBALL ELECTRONICS | DICKS Sporting vs. STORE ELECTRONIC | DICKS Sporting vs. Arrow Electronics | DICKS Sporting vs. AOI Electronics Co |
| ScanSource vs. WisdomTree Investments | ScanSource vs. COMBA TELECOM SYST | ScanSource vs. Cellnex Telecom SA | ScanSource vs. CDL INVESTMENT |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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