Correlation Between Macys and SCANSOURCE (SC3SG)
Can any of the company-specific risk be diversified away by investing in both Macys 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 Macys and SCANSOURCE (SC3SG) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and SCANSOURCE, you can compare the effects of market volatilities on Macys 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 Macys with a short position of SCANSOURCE (SC3SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and SCANSOURCE (SC3SG).
Diversification Opportunities for Macys and SCANSOURCE (SC3SG)
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Macys and SCANSOURCE is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE (SC3SG) and Macys 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 Macys 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 Macys i.e., Macys and SCANSOURCE (SC3SG) go up and down completely randomly.
Pair Corralation between Macys and SCANSOURCE (SC3SG)
Assuming the 90 days horizon Macys is expected to generate 7.31 times less return on investment than SCANSOURCE (SC3SG). In addition to that, Macys is 1.43 times more volatile than SCANSOURCE. It trades about 0.01 of its total potential returns per unit of risk. SCANSOURCE is currently generating about 0.06 per unit of volatility. If you would invest 2,820 in SCANSOURCE on September 4, 2024 and sell it today you would earn a total of 2,160 from holding SCANSOURCE or generate 76.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macys Inc vs. SCANSOURCE
Performance |
| Timeline |
| Macys Inc |
| SCANSOURCE (SC3SG) |
Macys and SCANSOURCE (SC3SG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macys and SCANSOURCE (SC3SG)
The main advantage of trading using opposite Macys and SCANSOURCE (SC3SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys 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.| Macys vs. RYOHIN UNSPADR1 | Macys vs. Superior Plus Corp | Macys vs. NMI Holdings | Macys vs. Origin Agritech |
| SCANSOURCE (SC3SG) vs. TOTAL GABON | SCANSOURCE (SC3SG) vs. Walgreens Boots Alliance | SCANSOURCE (SC3SG) vs. Peak Resources Limited |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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