Correlation Between 031162DQ0 and ScanSource

Can any of the company-specific risk be diversified away by investing in both 031162DQ0 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 031162DQ0 and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AMGN 525 02 MAR 30 and ScanSource, you can compare the effects of market volatilities on 031162DQ0 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 031162DQ0 with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of 031162DQ0 and ScanSource.

Diversification Opportunities for 031162DQ0 and ScanSource

-0.39

Correlation Coefficient

031162DQ0  ScanSource

Very good diversification

The 3 months correlation between 031162DQ0 and ScanSource is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding AMGN 525 02 MAR 30 and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and 031162DQ0 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 AMGN 525 02 MAR 30 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 031162DQ0 i.e., 031162DQ0 and ScanSource go up and down completely randomly.

Pair Corralation between 031162DQ0 and ScanSource

Assuming the 90 days trading horizon AMGN 525 02 MAR 30 is expected to under-perform the ScanSource. But the bond apears to be less risky and, when comparing its historical volatility, AMGN 525 02 MAR 30 is 5.96 times less risky than ScanSource. The bond trades about -0.15 of its potential returns per unit of risk. The ScanSource is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  4,708  in ScanSource on September 14, 2024 and sell it today you would earn a total of  548.00  from holding ScanSource or generate 11.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

AMGN 525 02 MAR 30  vs.  ScanSource

AMGN 525 02

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMGN 525 02 MAR 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 031162DQ0 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

ScanSource

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, ScanSource exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 031162DQ0 and ScanSource

The main advantage of trading using opposite 031162DQ0 and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 031162DQ0 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.

The idea behind AMGN 525 02 MAR 30 and ScanSource 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.