Correlation Between SEKISUI CHEMICAL and SCANSOURCE
Can any of the company-specific risk be diversified away by investing in both SEKISUI CHEMICAL and SCANSOURCE 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 SEKISUI CHEMICAL and SCANSOURCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEKISUI CHEMICAL and SCANSOURCE, you can compare the effects of market volatilities on SEKISUI CHEMICAL and SCANSOURCE 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 SEKISUI CHEMICAL with a short position of SCANSOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEKISUI CHEMICAL and SCANSOURCE.
Diversification Opportunities for SEKISUI CHEMICAL and SCANSOURCE
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SEKISUI and SCANSOURCE is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SEKISUI CHEMICAL and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL are associated (or correlated) with SCANSOURCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANSOURCE has no effect on the direction of SEKISUI CHEMICAL i.e., SEKISUI CHEMICAL and SCANSOURCE go up and down completely randomly.
Pair Corralation between SEKISUI CHEMICAL and SCANSOURCE
Assuming the 90 days trading horizon SEKISUI CHEMICAL is expected to generate 0.86 times more return on investment than SCANSOURCE. However, SEKISUI CHEMICAL is 1.17 times less risky than SCANSOURCE. It trades about 0.1 of its potential returns per unit of risk. SCANSOURCE is currently generating about -0.16 per unit of risk. If you would invest 1,420 in SEKISUI CHEMICAL on September 26, 2024 and sell it today you would earn a total of 50.00 from holding SEKISUI CHEMICAL or generate 3.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
SEKISUI CHEMICAL vs. SCANSOURCE
Performance |
Timeline |
SEKISUI CHEMICAL |
SCANSOURCE |
SEKISUI CHEMICAL and SCANSOURCE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SEKISUI CHEMICAL and SCANSOURCE
The main advantage of trading using opposite SEKISUI CHEMICAL and SCANSOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEKISUI CHEMICAL position performs unexpectedly, SCANSOURCE 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 SCANSOURCE will offset losses from the drop in SCANSOURCE's long position.SEKISUI CHEMICAL vs. Apple Inc | SEKISUI CHEMICAL vs. Apple Inc | SEKISUI CHEMICAL vs. Microsoft | SEKISUI CHEMICAL vs. Microsoft |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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