Correlation Between ScanSource and Stora Enso
Can any of the company-specific risk be diversified away by investing in both ScanSource and Stora Enso 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 Stora Enso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Stora Enso Oyj, you can compare the effects of market volatilities on ScanSource and Stora Enso 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 Stora Enso. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Stora Enso.
Diversification Opportunities for ScanSource and Stora Enso
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ScanSource and Stora is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Stora Enso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stora Enso Oyj 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 Stora Enso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stora Enso Oyj has no effect on the direction of ScanSource i.e., ScanSource and Stora Enso go up and down completely randomly.
Pair Corralation between ScanSource and Stora Enso
Assuming the 90 days horizon ScanSource is expected to generate 1.05 times more return on investment than Stora Enso. However, ScanSource is 1.05 times more volatile than Stora Enso Oyj. It trades about 0.06 of its potential returns per unit of risk. Stora Enso Oyj is currently generating about -0.02 per unit of risk. If you would invest 2,820 in ScanSource on September 5, 2024 and sell it today you would earn a total of 1,900 from holding ScanSource or generate 67.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
ScanSource vs. Stora Enso Oyj
Performance |
| Timeline |
| ScanSource |
| Stora Enso Oyj |
ScanSource and Stora Enso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ScanSource and Stora Enso
The main advantage of trading using opposite ScanSource and Stora Enso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Stora Enso 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 Stora Enso will offset losses from the drop in Stora Enso's long position.| ScanSource vs. PRECISION DRILLING P | ScanSource vs. Genco Shipping Trading | ScanSource vs. CDL INVESTMENT | ScanSource vs. SWISS WATER DECAFFCOFFEE |
| Stora Enso vs. United Natural Foods | Stora Enso vs. EBRO FOODS | Stora Enso vs. ScanSource | Stora Enso vs. PREMIER FOODS |
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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