Correlation Between ScanSource and Nok Airlines

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Can any of the company-specific risk be diversified away by investing in both ScanSource and Nok Airlines 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 Nok Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Nok Airlines Public, you can compare the effects of market volatilities on ScanSource and Nok Airlines 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 Nok Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Nok Airlines.

Diversification Opportunities for ScanSource and Nok Airlines

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between ScanSource and Nok is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Nok Airlines Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nok Airlines Public 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 Nok Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nok Airlines Public has no effect on the direction of ScanSource i.e., ScanSource and Nok Airlines go up and down completely randomly.

Pair Corralation between ScanSource and Nok Airlines

If you would invest  3,031  in ScanSource on September 2, 2024 and sell it today you would earn a total of  2,010  from holding ScanSource or generate 66.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

ScanSource  vs.  Nok Airlines Public

 Performance 
       Timeline  
ScanSource 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, ScanSource is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Nok Airlines Public 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nok Airlines Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Nok Airlines is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

ScanSource and Nok Airlines Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ScanSource and Nok Airlines

The main advantage of trading using opposite ScanSource and Nok Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Nok Airlines 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 Nok Airlines will offset losses from the drop in Nok Airlines' long position.
The idea behind ScanSource and Nok Airlines Public 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.
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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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