Correlation Between DICKS Sporting and SCANSOURCE (SC3SG)
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting 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 DICKS Sporting and SCANSOURCE (SC3SG) 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 (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 DICKS Sporting with a short position of SCANSOURCE (SC3SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and SCANSOURCE (SC3SG).
Diversification Opportunities for DICKS Sporting and SCANSOURCE (SC3SG)
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between DICKS and SCANSOURCE is 0.12. 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 (SC3SG) 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 (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 DICKS Sporting i.e., DICKS Sporting and SCANSOURCE (SC3SG) go up and down completely randomly.
Pair Corralation between DICKS Sporting and SCANSOURCE (SC3SG)
Assuming the 90 days horizon DICKS Sporting is expected to generate 1.14 times less return on investment than SCANSOURCE (SC3SG). In addition to that, DICKS Sporting is 1.12 times more volatile than SCANSOURCE. It trades about 0.03 of its total potential returns per unit of risk. SCANSOURCE is currently generating about 0.04 per unit of volatility. If you would invest 4,520 in SCANSOURCE on August 25, 2024 and sell it today you would earn a total of 360.00 from holding SCANSOURCE or generate 7.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
DICKS Sporting Goods vs. SCANSOURCE
Performance |
| Timeline |
| DICKS Sporting Goods |
| SCANSOURCE (SC3SG) |
DICKS Sporting and SCANSOURCE (SC3SG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKS Sporting and SCANSOURCE (SC3SG)
The main advantage of trading using opposite DICKS Sporting and SCANSOURCE (SC3SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting 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.| DICKS Sporting vs. Scandinavian Tobacco Group | DICKS Sporting vs. Sunstone Hotel Investors | DICKS Sporting vs. SHELF DRILLING LTD | DICKS Sporting vs. Regal Hotels International |
| SCANSOURCE (SC3SG) vs. MARKET VECTR RETAIL | SCANSOURCE (SC3SG) vs. Globe Trade Centre | SCANSOURCE (SC3SG) vs. CarsalesCom | SCANSOURCE (SC3SG) vs. AUTO TRADER ADR |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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