Correlation Between Global E and ScanSource
Can any of the company-specific risk be diversified away by investing in both Global E 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 Global E and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global E Online and ScanSource, you can compare the effects of market volatilities on Global E 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 Global E with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global E and ScanSource.
Diversification Opportunities for Global E and ScanSource
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and ScanSource is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and Global E 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 Global E Online 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 Global E i.e., Global E and ScanSource go up and down completely randomly.
Pair Corralation between Global E and ScanSource
Given the investment horizon of 90 days Global E is expected to generate 1.01 times less return on investment than ScanSource. In addition to that, Global E is 1.32 times more volatile than ScanSource. It trades about 0.07 of its total potential returns per unit of risk. ScanSource is currently generating about 0.09 per unit of volatility. If you would invest 3,343 in ScanSource on August 26, 2024 and sell it today you would earn a total of 1,767 from holding ScanSource or generate 52.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global E Online vs. ScanSource
Performance |
| Timeline |
| Global E Online |
| ScanSource |
Global E and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global E and ScanSource
The main advantage of trading using opposite Global E and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global E 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.| Global E vs. MercadoLibre | Global E vs. PDD Holdings | Global E vs. JD Inc Adr | Global E vs. Alibaba Group Holding |
| ScanSource vs. Climb Global Solutions | ScanSource vs. Insight Enterprises | ScanSource vs. Synnex | ScanSource vs. PC Connection |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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