Correlation Between ScanSource and Eaco Corp
Can any of the company-specific risk be diversified away by investing in both ScanSource and Eaco Corp 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 Eaco Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Eaco Corp, you can compare the effects of market volatilities on ScanSource and Eaco Corp 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 Eaco Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Eaco Corp.
Diversification Opportunities for ScanSource and Eaco Corp
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ScanSource and Eaco is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Eaco Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaco Corp 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 Eaco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaco Corp has no effect on the direction of ScanSource i.e., ScanSource and Eaco Corp go up and down completely randomly.
Pair Corralation between ScanSource and Eaco Corp
If you would invest 4,857 in ScanSource on October 25, 2024 and sell it today you would earn a total of 278.00 from holding ScanSource or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
ScanSource vs. Eaco Corp
Performance |
| Timeline |
| ScanSource |
| Eaco Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ScanSource and Eaco Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ScanSource and Eaco Corp
The main advantage of trading using opposite ScanSource and Eaco Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Eaco Corp 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 Eaco Corp will offset losses from the drop in Eaco Corp's long position.| ScanSource vs. Climb Global Solutions | ScanSource vs. Insight Enterprises | ScanSource vs. Synnex | ScanSource vs. PC Connection |
| Eaco Corp vs. Climb Global Solutions | Eaco Corp vs. Insight Enterprises | Eaco Corp vs. ScanSource | Eaco Corp vs. Synnex |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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