Correlation Between SCANSOURCE (SC3SG) and SAMS INTERNAT
Can any of the company-specific risk be diversified away by investing in both SCANSOURCE (SC3SG) and SAMS INTERNAT 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 SAMS INTERNAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANSOURCE and SAMS INTERNAT R, you can compare the effects of market volatilities on SCANSOURCE (SC3SG) and SAMS INTERNAT 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 SAMS INTERNAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANSOURCE (SC3SG) and SAMS INTERNAT.
Diversification Opportunities for SCANSOURCE (SC3SG) and SAMS INTERNAT
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCANSOURCE and SAMS is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SCANSOURCE and SAMS INTERNAT R in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMS INTERNAT R 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 SAMS INTERNAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAMS INTERNAT R has no effect on the direction of SCANSOURCE (SC3SG) i.e., SCANSOURCE (SC3SG) and SAMS INTERNAT go up and down completely randomly.
Pair Corralation between SCANSOURCE (SC3SG) and SAMS INTERNAT
Assuming the 90 days trading horizon SCANSOURCE (SC3SG) is expected to generate 1.09 times less return on investment than SAMS INTERNAT. But when comparing it to its historical volatility, SCANSOURCE is 1.37 times less risky than SAMS INTERNAT. It trades about 0.05 of its potential returns per unit of risk. SAMS INTERNAT R is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 184.00 in SAMS INTERNAT R on October 7, 2024 and sell it today you would earn a total of 88.00 from holding SAMS INTERNAT R or generate 47.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCANSOURCE vs. SAMS INTERNAT R
Performance |
| Timeline |
| SCANSOURCE (SC3SG) |
| SAMS INTERNAT R |
SCANSOURCE (SC3SG) and SAMS INTERNAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANSOURCE (SC3SG) and SAMS INTERNAT
The main advantage of trading using opposite SCANSOURCE (SC3SG) and SAMS INTERNAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANSOURCE (SC3SG) position performs unexpectedly, SAMS INTERNAT 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 SAMS INTERNAT will offset losses from the drop in SAMS INTERNAT's long position.| SCANSOURCE (SC3SG) vs. Advanced Medical Solutions | SCANSOURCE (SC3SG) vs. CVR Medical Corp | SCANSOURCE (SC3SG) vs. PEPTONIC MEDICAL | SCANSOURCE (SC3SG) vs. SWISS WATER DECAFFCOFFEE |
| SAMS INTERNAT vs. Verizon Communications | SAMS INTERNAT vs. Chunghwa Telecom Co | SAMS INTERNAT vs. ecotel communication ag | SAMS INTERNAT vs. Cogent Communications 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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