Correlation Between SCANSOURCE and CyberAgent
Can any of the company-specific risk be diversified away by investing in both SCANSOURCE and CyberAgent 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 CyberAgent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANSOURCE and CyberAgent, you can compare the effects of market volatilities on SCANSOURCE and CyberAgent 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 CyberAgent. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANSOURCE and CyberAgent.
Diversification Opportunities for SCANSOURCE and CyberAgent
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SCANSOURCE and CyberAgent is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SCANSOURCE and CyberAgent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberAgent 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 CyberAgent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberAgent has no effect on the direction of SCANSOURCE i.e., SCANSOURCE and CyberAgent go up and down completely randomly.
Pair Corralation between SCANSOURCE and CyberAgent
Assuming the 90 days trading horizon SCANSOURCE is expected to generate 1.33 times more return on investment than CyberAgent. However, SCANSOURCE is 1.33 times more volatile than CyberAgent. It trades about 0.15 of its potential returns per unit of risk. CyberAgent is currently generating about 0.01 per unit of risk. If you would invest 4,100 in SCANSOURCE on September 12, 2024 and sell it today you would earn a total of 950.00 from holding SCANSOURCE or generate 23.17% 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. CyberAgent
Performance |
| Timeline |
| SCANSOURCE |
| CyberAgent |
SCANSOURCE and CyberAgent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANSOURCE and CyberAgent
The main advantage of trading using opposite SCANSOURCE and CyberAgent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANSOURCE position performs unexpectedly, CyberAgent 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 CyberAgent will offset losses from the drop in CyberAgent's long position.The idea behind SCANSOURCE and CyberAgent 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.| CyberAgent vs. CNVISION MEDIA | CyberAgent vs. YOOMA WELLNESS INC | CyberAgent vs. Natural Health Trends | CyberAgent vs. National Health Investors |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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