Correlation Between SCANSOURCE and CAPITAL ONE
Can any of the company-specific risk be diversified away by investing in both SCANSOURCE and CAPITAL ONE 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 CAPITAL ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANSOURCE and CAPITAL ONE FIN, you can compare the effects of market volatilities on SCANSOURCE and CAPITAL ONE 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 CAPITAL ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANSOURCE and CAPITAL ONE.
Diversification Opportunities for SCANSOURCE and CAPITAL ONE
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SCANSOURCE and CAPITAL is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SCANSOURCE and CAPITAL ONE FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAPITAL ONE FIN 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 CAPITAL ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAPITAL ONE FIN has no effect on the direction of SCANSOURCE i.e., SCANSOURCE and CAPITAL ONE go up and down completely randomly.
Pair Corralation between SCANSOURCE and CAPITAL ONE
Assuming the 90 days trading horizon SCANSOURCE is expected to generate 2.07 times more return on investment than CAPITAL ONE. However, SCANSOURCE is 2.07 times more volatile than CAPITAL ONE FIN. It trades about 0.07 of its potential returns per unit of risk. CAPITAL ONE FIN is currently generating about 0.04 per unit of risk. If you would invest 4,060 in SCANSOURCE on September 15, 2024 and sell it today you would earn a total of 900.00 from holding SCANSOURCE or generate 22.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCANSOURCE vs. CAPITAL ONE FIN
Performance |
| Timeline |
| SCANSOURCE |
| CAPITAL ONE FIN |
SCANSOURCE and CAPITAL ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANSOURCE and CAPITAL ONE
The main advantage of trading using opposite SCANSOURCE and CAPITAL ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANSOURCE position performs unexpectedly, CAPITAL ONE 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 CAPITAL ONE will offset losses from the drop in CAPITAL ONE's long position.| SCANSOURCE vs. Monster Beverage Corp | SCANSOURCE vs. The Boston Beer | SCANSOURCE vs. THAI BEVERAGE | SCANSOURCE vs. Scientific Games |
| CAPITAL ONE vs. Magnachip Semiconductor | CAPITAL ONE vs. Carnegie Clean Energy | CAPITAL ONE vs. ADRIATIC METALS LS 013355 | CAPITAL ONE vs. SCANSOURCE |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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