Correlation Between SCANSOURCE (SC3SG) and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both SCANSOURCE (SC3SG) and Burlington Stores 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 Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANSOURCE and Burlington Stores, you can compare the effects of market volatilities on SCANSOURCE (SC3SG) and Burlington Stores 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 Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANSOURCE (SC3SG) and Burlington Stores.
Diversification Opportunities for SCANSOURCE (SC3SG) and Burlington Stores
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCANSOURCE and Burlington is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SCANSOURCE and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores 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 Burlington Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burlington Stores has no effect on the direction of SCANSOURCE (SC3SG) i.e., SCANSOURCE (SC3SG) and Burlington Stores go up and down completely randomly.
Pair Corralation between SCANSOURCE (SC3SG) and Burlington Stores
Assuming the 90 days trading horizon SCANSOURCE (SC3SG) is expected to generate 4.11 times less return on investment than Burlington Stores. In addition to that, SCANSOURCE (SC3SG) is 1.28 times more volatile than Burlington Stores. It trades about 0.02 of its total potential returns per unit of risk. Burlington Stores is currently generating about 0.12 per unit of volatility. If you would invest 24,000 in Burlington Stores on August 30, 2024 and sell it today you would earn a total of 3,400 from holding Burlington Stores or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCANSOURCE vs. Burlington Stores
Performance |
| Timeline |
| SCANSOURCE (SC3SG) |
| Burlington Stores |
SCANSOURCE (SC3SG) and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANSOURCE (SC3SG) and Burlington Stores
The main advantage of trading using opposite SCANSOURCE (SC3SG) and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANSOURCE (SC3SG) position performs unexpectedly, Burlington Stores 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 Burlington Stores will offset losses from the drop in Burlington Stores' 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 |
| Burlington Stores vs. Pebblebrook Hotel Trust | Burlington Stores vs. IMPERIAL TOBACCO | Burlington Stores vs. Choice Hotels International | Burlington Stores vs. MELIA HOTELS |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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