Correlation Between SCANSOURCE and Amcor Plc
Can any of the company-specific risk be diversified away by investing in both SCANSOURCE and Amcor Plc 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 Amcor Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANSOURCE and Amcor plc, you can compare the effects of market volatilities on SCANSOURCE and Amcor Plc 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 Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANSOURCE and Amcor Plc.
Diversification Opportunities for SCANSOURCE and Amcor Plc
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between SCANSOURCE and Amcor is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SCANSOURCE and Amcor plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor plc 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 Amcor Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor plc has no effect on the direction of SCANSOURCE i.e., SCANSOURCE and Amcor Plc go up and down completely randomly.
Pair Corralation between SCANSOURCE and Amcor Plc
Assuming the 90 days trading horizon SCANSOURCE is expected to generate 1.38 times more return on investment than Amcor Plc. However, SCANSOURCE is 1.38 times more volatile than Amcor plc. It trades about 0.11 of its potential returns per unit of risk. Amcor plc is currently generating about 0.11 per unit of risk. If you would invest 4,840 in SCANSOURCE on September 12, 2024 and sell it today you would earn a total of 210.00 from holding SCANSOURCE or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCANSOURCE vs. Amcor plc
Performance |
| Timeline |
| SCANSOURCE |
| Amcor plc |
SCANSOURCE and Amcor Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANSOURCE and Amcor Plc
The main advantage of trading using opposite SCANSOURCE and Amcor Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANSOURCE position performs unexpectedly, Amcor Plc 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 Amcor Plc will offset losses from the drop in Amcor Plc's long position.The idea behind SCANSOURCE and Amcor plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Amcor Plc vs. CeoTronics AG | Amcor Plc vs. SLR Investment Corp | Amcor Plc vs. Postal Savings Bank | Amcor Plc vs. Apollo Investment Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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