Correlation Between FirstCash and Scully Royalty

Can any of the company-specific risk be diversified away by investing in both FirstCash and Scully Royalty 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 FirstCash and Scully Royalty into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FirstCash and Scully Royalty, you can compare the effects of market volatilities on FirstCash and Scully Royalty 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 FirstCash with a short position of Scully Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstCash and Scully Royalty.

Diversification Opportunities for FirstCash and Scully Royalty

-0.05

Correlation Coefficient

FirstCash  Scully Royalty

Good diversification

The 3 months correlation between FirstCash and Scully is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding FirstCash and Scully Royalty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scully Royalty and FirstCash 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 FirstCash are associated (or correlated) with Scully Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scully Royalty has no effect on the direction of FirstCash i.e., FirstCash and Scully Royalty go up and down completely randomly.

Pair Corralation between FirstCash and Scully Royalty

Given the investment horizon of 90 days FirstCash is expected to under-perform the Scully Royalty. But the stock apears to be less risky and, when comparing its historical volatility, FirstCash is 1.13 times less risky than Scully Royalty. The stock trades about -0.2 of its potential returns per unit of risk. The Scully Royalty is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  580.00  in Scully Royalty on April 30, 2025 and sell it today you would earn a total of  20.00  from holding Scully Royalty or generate 3.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FirstCash  vs.  Scully Royalty

FirstCash

Risk-Adjusted Performance

Very Weak

Over the last 90 days FirstCash has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Scully Royalty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scully Royalty has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with FirstCash and Scully Royalty

The main advantage of trading using opposite FirstCash and Scully Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstCash position performs unexpectedly, Scully Royalty 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 Scully Royalty will offset losses from the drop in Scully Royalty's long position.

The idea behind FirstCash and Scully Royalty pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.