Correlation Between Hurco Companies and ScanSource
Can any of the company-specific risk be diversified away by investing in both Hurco Companies 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 Hurco Companies and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurco Companies and ScanSource, you can compare the effects of market volatilities on Hurco Companies 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 Hurco Companies with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurco Companies and ScanSource.
Diversification Opportunities for Hurco Companies and ScanSource
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hurco and ScanSource is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and Hurco Companies 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 Hurco Companies 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 Hurco Companies i.e., Hurco Companies and ScanSource go up and down completely randomly.
Pair Corralation between Hurco Companies and ScanSource
Given the investment horizon of 90 days Hurco Companies is expected to generate 1.34 times less return on investment than ScanSource. But when comparing it to its historical volatility, Hurco Companies is 1.36 times less risky than ScanSource. It trades about 0.22 of its potential returns per unit of risk. ScanSource is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,419 in ScanSource on September 3, 2024 and sell it today you would earn a total of 622.00 from holding ScanSource or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurco Companies vs. ScanSource
Performance |
| Timeline |
| Hurco Companies |
| ScanSource |
Hurco Companies and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurco Companies and ScanSource
The main advantage of trading using opposite Hurco Companies and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurco Companies 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.| Hurco Companies vs. Enerpac Tool Group | Hurco Companies vs. Enpro Industries | Hurco Companies vs. Omega Flex | Hurco Companies vs. Gorman Rupp |
| ScanSource vs. Climb Global Solutions | ScanSource vs. Insight Enterprises | ScanSource vs. Synnex | ScanSource vs. PC Connection |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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