Correlation Between ScanSource and Primerica
Can any of the company-specific risk be diversified away by investing in both ScanSource and Primerica 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 Primerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Primerica, you can compare the effects of market volatilities on ScanSource and Primerica 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 Primerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Primerica.
Diversification Opportunities for ScanSource and Primerica
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between ScanSource and Primerica is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Primerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primerica 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 Primerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primerica has no effect on the direction of ScanSource i.e., ScanSource and Primerica go up and down completely randomly.
Pair Corralation between ScanSource and Primerica
Given the investment horizon of 90 days ScanSource is expected to under-perform the Primerica. In addition to that, ScanSource is 2.76 times more volatile than Primerica. It trades about -0.44 of its total potential returns per unit of risk. Primerica is currently generating about -0.16 per unit of volatility. If you would invest 28,886 in Primerica on November 28, 2024 and sell it today you would lose (1,209) from holding Primerica or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ScanSource vs. Primerica
Performance |
| Timeline |
| ScanSource |
| Primerica |
ScanSource and Primerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ScanSource and Primerica
The main advantage of trading using opposite ScanSource and Primerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Primerica 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 Primerica will offset losses from the drop in Primerica's long position.| ScanSource vs. Climb Global Solutions | ScanSource vs. Insight Enterprises | ScanSource vs. Synnex | ScanSource vs. PC Connection |
| Primerica vs. CNO Financial Group | Primerica vs. Aflac Incorporated | Primerica vs. Prudential PLC ADR | Primerica vs. FG Annuities Life |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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