Correlation Between SCANSOURCE (SC3SG) and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both SCANSOURCE (SC3SG) and Electronic Arts 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 Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANSOURCE and Electronic Arts, you can compare the effects of market volatilities on SCANSOURCE (SC3SG) and Electronic Arts 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 Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANSOURCE (SC3SG) and Electronic Arts.
Diversification Opportunities for SCANSOURCE (SC3SG) and Electronic Arts
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCANSOURCE and Electronic is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding SCANSOURCE and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts 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 Electronic Arts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Arts has no effect on the direction of SCANSOURCE (SC3SG) i.e., SCANSOURCE (SC3SG) and Electronic Arts go up and down completely randomly.
Pair Corralation between SCANSOURCE (SC3SG) and Electronic Arts
Assuming the 90 days trading horizon SCANSOURCE is expected to generate 2.08 times more return on investment than Electronic Arts. However, SCANSOURCE (SC3SG) is 2.08 times more volatile than Electronic Arts. It trades about -0.19 of its potential returns per unit of risk. Electronic Arts is currently generating about -0.54 per unit of risk. If you would invest 5,000 in SCANSOURCE on October 17, 2024 and sell it today you would lose (280.00) from holding SCANSOURCE or give up 5.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCANSOURCE vs. Electronic Arts
Performance |
| Timeline |
| SCANSOURCE (SC3SG) |
| Electronic Arts |
SCANSOURCE (SC3SG) and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANSOURCE (SC3SG) and Electronic Arts
The main advantage of trading using opposite SCANSOURCE (SC3SG) and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANSOURCE (SC3SG) position performs unexpectedly, Electronic Arts 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 Electronic Arts will offset losses from the drop in Electronic Arts' long position.| SCANSOURCE (SC3SG) vs. GALENA MINING LTD | SCANSOURCE (SC3SG) vs. Easy Software AG | SCANSOURCE (SC3SG) vs. Jacquet Metal Service | SCANSOURCE (SC3SG) vs. ADRIATIC METALS LS 013355 |
| Electronic Arts vs. CanSino Biologics | Electronic Arts vs. Pure Storage | Electronic Arts vs. SCANSOURCE | Electronic Arts vs. BOSTON BEER A |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |