Correlation Between ScanSource and Air Lease
Can any of the company-specific risk be diversified away by investing in both ScanSource and Air Lease 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 Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Air Lease, you can compare the effects of market volatilities on ScanSource and Air Lease 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 Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Air Lease.
Diversification Opportunities for ScanSource and Air Lease
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ScanSource and Air is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease 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 Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of ScanSource i.e., ScanSource and Air Lease go up and down completely randomly.
Pair Corralation between ScanSource and Air Lease
Assuming the 90 days horizon ScanSource is expected to generate 1.27 times more return on investment than Air Lease. However, ScanSource is 1.27 times more volatile than Air Lease. It trades about 0.02 of its potential returns per unit of risk. Air Lease is currently generating about -0.04 per unit of risk. If you would invest 4,560 in ScanSource on October 17, 2024 and sell it today you would earn a total of 20.00 from holding ScanSource or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ScanSource vs. Air Lease
Performance |
| Timeline |
| ScanSource |
| Air Lease |
ScanSource and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ScanSource and Air Lease
The main advantage of trading using opposite ScanSource and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| ScanSource vs. Nucletron Electronic Aktiengesellschaft | ScanSource vs. Direct Line Insurance | ScanSource vs. Samsung Electronics Co | ScanSource vs. TT Electronics PLC |
| Air Lease vs. ScanSource | Air Lease vs. PICKN PAY STORES | Air Lease vs. Scottish Mortgage Investment | Air Lease vs. RETAIL FOOD GROUP |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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