Correlation Between ScanSource and Ping An
Can any of the company-specific risk be diversified away by investing in both ScanSource and Ping An 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 Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Ping An Healthcare, you can compare the effects of market volatilities on ScanSource and Ping An 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 Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Ping An.
Diversification Opportunities for ScanSource and Ping An
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between ScanSource and Ping is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Ping An Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Healthcare 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 Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Healthcare has no effect on the direction of ScanSource i.e., ScanSource and Ping An go up and down completely randomly.
Pair Corralation between ScanSource and Ping An
Assuming the 90 days horizon ScanSource is expected to generate 0.15 times more return on investment than Ping An. However, ScanSource is 6.84 times less risky than Ping An. It trades about 0.18 of its potential returns per unit of risk. Ping An Healthcare is currently generating about -0.21 per unit of risk. If you would invest 4,640 in ScanSource on September 15, 2024 and sell it today you would earn a total of 340.00 from holding ScanSource or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ScanSource vs. Ping An Healthcare
Performance |
| Timeline |
| ScanSource |
| Ping An Healthcare |
ScanSource and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ScanSource and Ping An
The main advantage of trading using opposite ScanSource and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Ping An 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 Ping An will offset losses from the drop in Ping An's long position.The idea behind ScanSource and Ping An Healthcare 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.| Ping An vs. YATRA ONLINE DL 0001 | Ping An vs. CODERE ONLINE LUX | Ping An vs. ScanSource | Ping An vs. CARSALESCOM |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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