Correlation Between Walmart and ScanSource
Can any of the company-specific risk be diversified away by investing in both Walmart 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 Walmart and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and ScanSource, you can compare the effects of market volatilities on Walmart 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 Walmart with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and ScanSource.
Diversification Opportunities for Walmart and ScanSource
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walmart and ScanSource is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and Walmart 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 Walmart 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 Walmart i.e., Walmart and ScanSource go up and down completely randomly.
Pair Corralation between Walmart and ScanSource
Considering the 90-day investment horizon Walmart is expected to under-perform the ScanSource. But the stock apears to be less risky and, when comparing its historical volatility, Walmart is 2.8 times less risky than ScanSource. The stock trades about -0.16 of its potential returns per unit of risk. The ScanSource is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,211 in ScanSource on January 25, 2024 and sell it today you would earn a total of 234.00 from holding ScanSource or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. ScanSource
Performance |
| Timeline |
| Walmart |
| ScanSource |
Walmart and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and ScanSource
The main advantage of trading using opposite Walmart and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart 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.| Walmart vs. Big Lots | Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation |
| ScanSource vs. Climb Global Solutions | ScanSource vs. Insight Enterprises | ScanSource vs. Snap One Holdings | ScanSource 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |