Correlation Between SCANSOURCE (SC3SG) and Wayside Technology
Can any of the company-specific risk be diversified away by investing in both SCANSOURCE (SC3SG) and Wayside Technology 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 Wayside Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANSOURCE and Wayside Technology Group, you can compare the effects of market volatilities on SCANSOURCE (SC3SG) and Wayside Technology 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 Wayside Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANSOURCE (SC3SG) and Wayside Technology.
Diversification Opportunities for SCANSOURCE (SC3SG) and Wayside Technology
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SCANSOURCE and Wayside is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding SCANSOURCE and Wayside Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayside Technology 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 Wayside Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayside Technology has no effect on the direction of SCANSOURCE (SC3SG) i.e., SCANSOURCE (SC3SG) and Wayside Technology go up and down completely randomly.
Pair Corralation between SCANSOURCE (SC3SG) and Wayside Technology
Assuming the 90 days trading horizon SCANSOURCE (SC3SG) is expected to generate 2.8 times less return on investment than Wayside Technology. But when comparing it to its historical volatility, SCANSOURCE is 1.39 times less risky than Wayside Technology. It trades about 0.05 of its potential returns per unit of risk. Wayside Technology Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,180 in Wayside Technology Group on October 14, 2024 and sell it today you would earn a total of 8,920 from holding Wayside Technology Group or generate 280.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCANSOURCE vs. Wayside Technology Group
Performance |
| Timeline |
| SCANSOURCE (SC3SG) |
| Wayside Technology |
SCANSOURCE (SC3SG) and Wayside Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANSOURCE (SC3SG) and Wayside Technology
The main advantage of trading using opposite SCANSOURCE (SC3SG) and Wayside Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANSOURCE (SC3SG) position performs unexpectedly, Wayside Technology 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 Wayside Technology will offset losses from the drop in Wayside Technology's long position.| SCANSOURCE (SC3SG) vs. CDN IMPERIAL BANK | SCANSOURCE (SC3SG) vs. Erste Group Bank | SCANSOURCE (SC3SG) vs. COREBRIDGE FINANCIAL INC | SCANSOURCE (SC3SG) vs. United Insurance Holdings |
| Wayside Technology vs. NURAN WIRELESS INC | Wayside Technology vs. MINCO SILVER | Wayside Technology vs. SCANSOURCE | Wayside Technology vs. GALENA MINING LTD |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |