Correlation Between CompuGroup Medical and ScanSource
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical 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 CompuGroup Medical and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompuGroup Medical SE and ScanSource, you can compare the effects of market volatilities on CompuGroup Medical 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 CompuGroup Medical with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and ScanSource.
Diversification Opportunities for CompuGroup Medical and ScanSource
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CompuGroup and ScanSource is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and CompuGroup Medical 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 CompuGroup Medical SE 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 CompuGroup Medical i.e., CompuGroup Medical and ScanSource go up and down completely randomly.
Pair Corralation between CompuGroup Medical and ScanSource
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to under-perform the ScanSource. In addition to that, CompuGroup Medical is 1.42 times more volatile than ScanSource. It trades about -0.02 of its total potential returns per unit of risk. ScanSource is currently generating about 0.05 per unit of volatility. If you would invest 2,980 in ScanSource on October 11, 2024 and sell it today you would earn a total of 1,660 from holding ScanSource or generate 55.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical SE vs. ScanSource
Performance |
| Timeline |
| CompuGroup Medical |
| ScanSource |
CompuGroup Medical and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and ScanSource
The main advantage of trading using opposite CompuGroup Medical and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical 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.| CompuGroup Medical vs. Arrow Electronics | CompuGroup Medical vs. Delta Electronics Public | CompuGroup Medical vs. Eurasia Mining Plc | CompuGroup Medical vs. Electronic Arts |
| ScanSource vs. CompuGroup Medical SE | ScanSource vs. IMAGIN MEDICAL INC | ScanSource vs. SCANDMEDICAL SOLDK 040 | ScanSource vs. Khiron Life Sciences |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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