Correlation Between ScanSource and Apollo Medical
Can any of the company-specific risk be diversified away by investing in both ScanSource and Apollo Medical 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 Apollo Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Apollo Medical Holdings, you can compare the effects of market volatilities on ScanSource and Apollo Medical 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 Apollo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Apollo Medical.
Diversification Opportunities for ScanSource and Apollo Medical
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between ScanSource and Apollo is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Apollo Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Medical Holdings 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 Apollo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Medical Holdings has no effect on the direction of ScanSource i.e., ScanSource and Apollo Medical go up and down completely randomly.
Pair Corralation between ScanSource and Apollo Medical
Assuming the 90 days horizon ScanSource is expected to under-perform the Apollo Medical. But the stock apears to be less risky and, when comparing its historical volatility, ScanSource is 1.44 times less risky than Apollo Medical. The stock trades about -0.31 of its potential returns per unit of risk. The Apollo Medical Holdings is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 3,500 in Apollo Medical Holdings on January 1, 2025 and sell it today you would lose (720.00) from holding Apollo Medical Holdings or give up 20.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ScanSource vs. Apollo Medical Holdings
Performance |
| Timeline |
| ScanSource |
| Apollo Medical Holdings |
ScanSource and Apollo Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ScanSource and Apollo Medical
The main advantage of trading using opposite ScanSource and Apollo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Apollo Medical 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 Apollo Medical will offset losses from the drop in Apollo Medical's long position.| ScanSource vs. GREENX METALS LTD | ||
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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