Correlation Between SCANSOURCE (SC3SG) and CVB Financial
Can any of the company-specific risk be diversified away by investing in both SCANSOURCE (SC3SG) and CVB Financial 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 CVB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANSOURCE and CVB Financial Corp, you can compare the effects of market volatilities on SCANSOURCE (SC3SG) and CVB Financial 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 CVB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANSOURCE (SC3SG) and CVB Financial.
Diversification Opportunities for SCANSOURCE (SC3SG) and CVB Financial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SCANSOURCE and CVB is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SCANSOURCE and CVB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVB Financial Corp 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 CVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVB Financial Corp has no effect on the direction of SCANSOURCE (SC3SG) i.e., SCANSOURCE (SC3SG) and CVB Financial go up and down completely randomly.
Pair Corralation between SCANSOURCE (SC3SG) and CVB Financial
Assuming the 90 days trading horizon SCANSOURCE is expected to generate 0.92 times more return on investment than CVB Financial. However, SCANSOURCE is 1.09 times less risky than CVB Financial. It trades about 0.08 of its potential returns per unit of risk. CVB Financial Corp is currently generating about 0.06 per unit of risk. If you would invest 2,960 in SCANSOURCE on October 16, 2024 and sell it today you would earn a total of 1,760 from holding SCANSOURCE or generate 59.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCANSOURCE vs. CVB Financial Corp
Performance |
| Timeline |
| SCANSOURCE (SC3SG) |
| CVB Financial Corp |
SCANSOURCE (SC3SG) and CVB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANSOURCE (SC3SG) and CVB Financial
The main advantage of trading using opposite SCANSOURCE (SC3SG) and CVB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANSOURCE (SC3SG) position performs unexpectedly, CVB Financial 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 CVB Financial will offset losses from the drop in CVB Financial's long position.| SCANSOURCE (SC3SG) vs. Beazer Homes USA | SCANSOURCE (SC3SG) vs. OFFICE DEPOT | SCANSOURCE (SC3SG) vs. Haverty Furniture Companies | SCANSOURCE (SC3SG) vs. Molson Coors Beverage |
| CVB Financial vs. Haier Smart Home | CVB Financial vs. ADDUS HOMECARE | CVB Financial vs. Hisense Home Appliances | CVB Financial vs. CITIC Telecom International |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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