Correlation Between ScanSource and Corporate Travel
Can any of the company-specific risk be diversified away by investing in both ScanSource and Corporate Travel 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 Corporate Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Corporate Travel Management, you can compare the effects of market volatilities on ScanSource and Corporate Travel 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 Corporate Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Corporate Travel.
Diversification Opportunities for ScanSource and Corporate Travel
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ScanSource and Corporate is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Corporate Travel Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Travel Man 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 Corporate Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Travel Man has no effect on the direction of ScanSource i.e., ScanSource and Corporate Travel go up and down completely randomly.
Pair Corralation between ScanSource and Corporate Travel
Assuming the 90 days horizon ScanSource is expected to generate 1.43 times less return on investment than Corporate Travel. In addition to that, ScanSource is 1.11 times more volatile than Corporate Travel Management. It trades about 0.2 of its total potential returns per unit of risk. Corporate Travel Management is currently generating about 0.31 per unit of volatility. If you would invest 700.00 in Corporate Travel Management on August 28, 2024 and sell it today you would earn a total of 145.00 from holding Corporate Travel Management or generate 20.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ScanSource vs. Corporate Travel Management
Performance |
| Timeline |
| ScanSource |
| Corporate Travel Man |
ScanSource and Corporate Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ScanSource and Corporate Travel
The main advantage of trading using opposite ScanSource and Corporate Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Corporate Travel 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 Corporate Travel will offset losses from the drop in Corporate Travel's long position.| ScanSource vs. Cars Inc | ScanSource vs. Goodyear Tire Rubber | ScanSource vs. SANOK RUBBER ZY | ScanSource vs. Eagle Materials |
| Corporate Travel vs. Penta Ocean Construction Co | Corporate Travel vs. Daito Trust Construction | Corporate Travel vs. Sterling Construction | Corporate Travel vs. WIMFARM SA EO |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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