Correlation Between STORE ELECTRONIC and ScanSource
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC 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 STORE ELECTRONIC and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STORE ELECTRONIC and ScanSource, you can compare the effects of market volatilities on STORE ELECTRONIC 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 STORE ELECTRONIC with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and ScanSource.
Diversification Opportunities for STORE ELECTRONIC and ScanSource
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STORE and ScanSource is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC i.e., STORE ELECTRONIC and ScanSource go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and ScanSource
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to under-perform the ScanSource. But the stock apears to be less risky and, when comparing its historical volatility, STORE ELECTRONIC is 1.08 times less risky than ScanSource. The stock trades about 0.0 of its potential returns per unit of risk. The ScanSource is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,360 in ScanSource on August 31, 2024 and sell it today you would earn a total of 380.00 from holding ScanSource or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
STORE ELECTRONIC vs. ScanSource
Performance |
| Timeline |
| STORE ELECTRONIC |
| ScanSource |
STORE ELECTRONIC and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STORE ELECTRONIC and ScanSource
The main advantage of trading using opposite STORE ELECTRONIC and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC 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.| STORE ELECTRONIC vs. ADRIATIC METALS LS 013355 | STORE ELECTRONIC vs. LION ONE METALS | STORE ELECTRONIC vs. Beijing Media | STORE ELECTRONIC vs. PARKEN Sport Entertainment |
| ScanSource vs. Boyd Gaming | ScanSource vs. NXP Semiconductors NV | ScanSource vs. Media and Games | ScanSource vs. ANGLER GAMING PLC |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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