Correlation Between SCANSOURCE (SC3SG) and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both SCANSOURCE (SC3SG) and PennantPark Investment 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 (SC3SG) and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANSOURCE and PennantPark Investment, you can compare the effects of market volatilities on SCANSOURCE (SC3SG) and PennantPark Investment 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 (SC3SG) with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANSOURCE (SC3SG) and PennantPark Investment.
Diversification Opportunities for SCANSOURCE (SC3SG) and PennantPark Investment
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCANSOURCE and PennantPark is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding SCANSOURCE and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and SCANSOURCE (SC3SG) 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 PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of SCANSOURCE (SC3SG) i.e., SCANSOURCE (SC3SG) and PennantPark Investment go up and down completely randomly.
Pair Corralation between SCANSOURCE (SC3SG) and PennantPark Investment
Assuming the 90 days trading horizon SCANSOURCE is expected to generate 1.29 times more return on investment than PennantPark Investment. However, SCANSOURCE (SC3SG) is 1.29 times more volatile than PennantPark Investment. It trades about 0.24 of its potential returns per unit of risk. PennantPark Investment is currently generating about 0.04 per unit of risk. If you would invest 4,080 in SCANSOURCE on August 31, 2024 and sell it today you would earn a total of 680.00 from holding SCANSOURCE or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCANSOURCE vs. PennantPark Investment
Performance |
| Timeline |
| SCANSOURCE (SC3SG) |
| PennantPark Investment |
SCANSOURCE (SC3SG) and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANSOURCE (SC3SG) and PennantPark Investment
The main advantage of trading using opposite SCANSOURCE (SC3SG) and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANSOURCE (SC3SG) position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.| SCANSOURCE (SC3SG) vs. Infrastrutture Wireless Italiane | SCANSOURCE (SC3SG) vs. CANON MARKETING JP | SCANSOURCE (SC3SG) vs. Auto Trader Group | SCANSOURCE (SC3SG) vs. Singapore Airlines Limited |
| PennantPark Investment vs. Ameriprise Financial | PennantPark Investment vs. Ares Management Corp | PennantPark Investment vs. Superior Plus Corp | PennantPark Investment vs. NMI Holdings |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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