Correlation Between CSSC Offshore and SCANSOURCE (SC3SG)
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore 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 CSSC Offshore and SCANSOURCE (SC3SG) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSSC Offshore Marine and SCANSOURCE, you can compare the effects of market volatilities on CSSC Offshore 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 CSSC Offshore with a short position of SCANSOURCE (SC3SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and SCANSOURCE (SC3SG).
Diversification Opportunities for CSSC Offshore and SCANSOURCE (SC3SG)
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CSSC and SCANSOURCE is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE (SC3SG) and CSSC Offshore 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 CSSC Offshore Marine 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 CSSC Offshore i.e., CSSC Offshore and SCANSOURCE (SC3SG) go up and down completely randomly.
Pair Corralation between CSSC Offshore and SCANSOURCE (SC3SG)
Assuming the 90 days trading horizon CSSC Offshore is expected to generate 1.32 times less return on investment than SCANSOURCE (SC3SG). In addition to that, CSSC Offshore is 1.49 times more volatile than SCANSOURCE. It trades about 0.04 of its total potential returns per unit of risk. SCANSOURCE is currently generating about 0.07 per unit of volatility. If you would invest 3,400 in SCANSOURCE on September 3, 2024 and sell it today you would earn a total of 1,340 from holding SCANSOURCE or generate 39.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSSC Offshore Marine vs. SCANSOURCE
Performance |
| Timeline |
| CSSC Offshore Marine |
| SCANSOURCE (SC3SG) |
CSSC Offshore and SCANSOURCE (SC3SG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and SCANSOURCE (SC3SG)
The main advantage of trading using opposite CSSC Offshore and SCANSOURCE (SC3SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore 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.| CSSC Offshore vs. SBA Communications Corp | CSSC Offshore vs. FIREWEED METALS P | CSSC Offshore vs. Jacquet Metal Service | CSSC Offshore vs. Shenandoah Telecommunications |
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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 Positions Ratings module to 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.
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