Correlation Between ScanSource and Latch
Can any of the company-specific risk be diversified away by investing in both ScanSource and Latch 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 Latch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Latch Inc, you can compare the effects of market volatilities on ScanSource and Latch 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 Latch. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Latch.
Diversification Opportunities for ScanSource and Latch
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ScanSource and Latch is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Latch Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latch Inc 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 Latch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latch Inc has no effect on the direction of ScanSource i.e., ScanSource and Latch go up and down completely randomly.
Pair Corralation between ScanSource and Latch
If you would invest 4,680 in ScanSource on September 3, 2024 and sell it today you would earn a total of 600.00 from holding ScanSource or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
ScanSource vs. Latch Inc
Performance |
| Timeline |
| ScanSource |
| Latch Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ScanSource and Latch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ScanSource and Latch
The main advantage of trading using opposite ScanSource and Latch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Latch 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 Latch will offset losses from the drop in Latch's long position.| ScanSource vs. Climb Global Solutions | ScanSource vs. Insight Enterprises | ScanSource vs. Synnex | ScanSource vs. PC Connection |
| Latch vs. Evolution Gaming Group | Latch vs. Saia Inc | Latch vs. Verra Mobility Corp | Latch vs. The9 Ltd ADR |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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