Correlation Between ScanSource and Arch Capital
Can any of the company-specific risk be diversified away by investing in both ScanSource and Arch Capital 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 ScanSource and Arch Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Arch Capital Group, you can compare the effects of market volatilities on ScanSource and Arch Capital 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 ScanSource with a short position of Arch Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Arch Capital.
Diversification Opportunities for ScanSource and Arch Capital
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between ScanSource and Arch is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Arch Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arch Capital Group and ScanSource 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 ScanSource are associated (or correlated) with Arch Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arch Capital Group has no effect on the direction of ScanSource i.e., ScanSource and Arch Capital go up and down completely randomly.
Pair Corralation between ScanSource and Arch Capital
Assuming the 90 days horizon ScanSource is expected to generate 1.18 times more return on investment than Arch Capital. However, ScanSource is 1.18 times more volatile than Arch Capital Group. It trades about 0.19 of its potential returns per unit of risk. Arch Capital Group is currently generating about 0.03 per unit of risk. If you would invest 4,140 in ScanSource on August 26, 2024 and sell it today you would earn a total of 540.00 from holding ScanSource or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ScanSource vs. Arch Capital Group
Performance |
| Timeline |
| ScanSource |
| Arch Capital Group |
ScanSource and Arch Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ScanSource and Arch Capital
The main advantage of trading using opposite ScanSource and Arch Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Arch Capital 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 Arch Capital will offset losses from the drop in Arch Capital's long position.| ScanSource vs. MULTI CHEM LTD | ScanSource vs. HUT 8 P | ScanSource vs. AGRICUL BK CHINA H | ScanSource vs. United Natural Foods |
| Arch Capital vs. ScanSource | Arch Capital vs. FUTURE GAMING GRP | Arch Capital vs. China Resources Beer | Arch Capital vs. Hochschild Mining 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |