Correlation Between Peak Resources and SCANSOURCE (SC3SG)
Can any of the company-specific risk be diversified away by investing in both Peak Resources 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 Peak Resources and SCANSOURCE (SC3SG) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peak Resources Limited and SCANSOURCE, you can compare the effects of market volatilities on Peak Resources 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 Peak Resources with a short position of SCANSOURCE (SC3SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Resources and SCANSOURCE (SC3SG).
Diversification Opportunities for Peak Resources and SCANSOURCE (SC3SG)
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Peak and SCANSOURCE is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE (SC3SG) and Peak Resources 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 Peak Resources Limited 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 Peak Resources i.e., Peak Resources and SCANSOURCE (SC3SG) go up and down completely randomly.
Pair Corralation between Peak Resources and SCANSOURCE (SC3SG)
Assuming the 90 days horizon Peak Resources Limited is expected to under-perform the SCANSOURCE (SC3SG). In addition to that, Peak Resources is 3.83 times more volatile than SCANSOURCE. It trades about -0.04 of its total potential returns per unit of risk. SCANSOURCE is currently generating about 0.1 per unit of volatility. If you would invest 4,340 in SCANSOURCE on September 4, 2024 and sell it today you would earn a total of 640.00 from holding SCANSOURCE or generate 14.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 98.46% |
Values | Daily Returns |
Peak Resources Limited vs. SCANSOURCE
Performance |
Timeline |
Peak Resources |
SCANSOURCE (SC3SG) |
Peak Resources and SCANSOURCE (SC3SG) Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Peak Resources and SCANSOURCE (SC3SG)
The main advantage of trading using opposite Peak Resources and SCANSOURCE (SC3SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources 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.Peak Resources vs. BHP Group Limited | Peak Resources vs. Rio Tinto Group | Peak Resources vs. Vale SA | Peak Resources vs. Glencore plc |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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