Correlation Between ScanSource and Hawkins
Can any of the company-specific risk be diversified away by investing in both ScanSource and Hawkins 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 Hawkins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Hawkins, you can compare the effects of market volatilities on ScanSource and Hawkins 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 Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Hawkins.
Diversification Opportunities for ScanSource and Hawkins
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ScanSource and Hawkins is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins 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 Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of ScanSource i.e., ScanSource and Hawkins go up and down completely randomly.
Pair Corralation between ScanSource and Hawkins
Given the investment horizon of 90 days ScanSource is expected to generate 2.06 times less return on investment than Hawkins. But when comparing it to its historical volatility, ScanSource is 1.16 times less risky than Hawkins. It trades about 0.08 of its potential returns per unit of risk. Hawkins is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,325 in Hawkins on September 4, 2024 and sell it today you would earn a total of 7,340 from holding Hawkins or generate 116.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ScanSource vs. Hawkins
Performance |
| Timeline |
| ScanSource |
| Hawkins |
ScanSource and Hawkins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ScanSource and Hawkins
The main advantage of trading using opposite ScanSource and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Hawkins 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 Hawkins will offset losses from the drop in Hawkins' long position.| ScanSource vs. Climb Global Solutions | ScanSource vs. Insight Enterprises | ScanSource vs. Synnex | ScanSource vs. PC Connection |
| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |