Correlation Between Procter Gamble and ScanSource
Can any of the company-specific risk be diversified away by investing in both Procter Gamble 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 Procter Gamble and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and ScanSource, you can compare the effects of market volatilities on Procter Gamble 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 Procter Gamble with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and ScanSource.
Diversification Opportunities for Procter Gamble and ScanSource
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Procter and ScanSource is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and Procter Gamble 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 Procter Gamble 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 Procter Gamble i.e., Procter Gamble and ScanSource go up and down completely randomly.
Pair Corralation between Procter Gamble and ScanSource
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 1.62 times less return on investment than ScanSource. But when comparing it to its historical volatility, Procter Gamble is 2.31 times less risky than ScanSource. It trades about 0.07 of its potential returns per unit of risk. ScanSource is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,323 in ScanSource on August 27, 2024 and sell it today you would earn a total of 787.00 from holding ScanSource or generate 18.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. ScanSource
Performance |
| Timeline |
| Procter Gamble |
| ScanSource |
Procter Gamble and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and ScanSource
The main advantage of trading using opposite Procter Gamble and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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.| Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty | Procter Gamble vs. Coty Inc |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges |