Correlation Between Corporate Travel and ScanSource
Can any of the company-specific risk be diversified away by investing in both Corporate Travel 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 Corporate Travel and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Travel Management and ScanSource, you can compare the effects of market volatilities on Corporate Travel 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 Corporate Travel with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and ScanSource.
Diversification Opportunities for Corporate Travel and ScanSource
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Corporate and ScanSource is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Travel Management and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and Corporate Travel 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 Corporate Travel Management 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 Corporate Travel i.e., Corporate Travel and ScanSource go up and down completely randomly.
Pair Corralation between Corporate Travel and ScanSource
Assuming the 90 days trading horizon Corporate Travel Management is expected to generate 1.28 times more return on investment than ScanSource. However, Corporate Travel is 1.28 times more volatile than ScanSource. It trades about 0.12 of its potential returns per unit of risk. ScanSource is currently generating about 0.07 per unit of risk. If you would invest 673.00 in Corporate Travel Management on August 28, 2024 and sell it today you would earn a total of 172.00 from holding Corporate Travel Management or generate 25.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Travel Management vs. ScanSource
Performance |
| Timeline |
| Corporate Travel Man |
| ScanSource |
Corporate Travel and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Travel and ScanSource
The main advantage of trading using opposite Corporate Travel and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Travel 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.| Corporate Travel vs. Penta Ocean Construction Co | Corporate Travel vs. Daito Trust Construction | Corporate Travel vs. Sterling Construction | Corporate Travel vs. WIMFARM SA EO |
| ScanSource vs. Cars Inc | ScanSource vs. Goodyear Tire Rubber | ScanSource vs. SANOK RUBBER ZY | ScanSource vs. Eagle Materials |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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