Correlation Between ScanSource and 361448BC6

Can any of the company-specific risk be diversified away by investing in both ScanSource and 361448BC6 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 361448BC6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ScanSource and GATX P 455, you can compare the effects of market volatilities on ScanSource and 361448BC6 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 361448BC6. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and 361448BC6.

Diversification Opportunities for ScanSource and 361448BC6

-0.27

Correlation Coefficient

ScanSource  361448BC6

Very good diversification

The 3 months correlation between ScanSource and 361448BC6 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and GATX P 455 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GATX P 455 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 361448BC6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GATX P 455 has no effect on the direction of ScanSource i.e., ScanSource and 361448BC6 go up and down completely randomly.

Pair Corralation between ScanSource and 361448BC6

Given the investment horizon of 90 days ScanSource is expected to generate 3.99 times more return on investment than 361448BC6. However, ScanSource is 3.99 times more volatile than GATX P 455. It trades about 0.04 of its potential returns per unit of risk. GATX P 455 is currently generating about -0.09 per unit of risk. If you would invest  4,862  in ScanSource on September 2, 2024 and sell it today you would earn a total of  179.00  from holding ScanSource or generate 3.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	56.25%
Values	Daily Returns

ScanSource  vs.  GATX P 455

ScanSource

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, ScanSource is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

GATX P 455

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GATX P 455 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 361448BC6 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ScanSource and 361448BC6

The main advantage of trading using opposite ScanSource and 361448BC6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, 361448BC6 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 361448BC6 will offset losses from the drop in 361448BC6's long position.

The idea behind ScanSource and GATX P 455 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 Stocks Directory module to find actively traded stocks across global markets.