Correlation Between TotalEnergies and ScanSource
Can any of the company-specific risk be diversified away by investing in both TotalEnergies and ScanSource 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 TotalEnergies and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TotalEnergies SE and ScanSource, you can compare the effects of market volatilities on TotalEnergies and ScanSource 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 TotalEnergies with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of TotalEnergies and ScanSource.
Diversification Opportunities for TotalEnergies and ScanSource
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TotalEnergies and ScanSource is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding TotalEnergies SE and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and TotalEnergies 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 TotalEnergies SE are associated (or correlated) with ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of TotalEnergies i.e., TotalEnergies and ScanSource go up and down completely randomly.
Pair Corralation between TotalEnergies and ScanSource
Assuming the 90 days trading horizon TotalEnergies SE is expected to under-perform the ScanSource. But the stock apears to be less risky and, when comparing its historical volatility, TotalEnergies SE is 2.24 times less risky than ScanSource. The stock trades about -0.22 of its potential returns per unit of risk. The ScanSource is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 3,980 in ScanSource on September 4, 2024 and sell it today you would earn a total of 740.00 from holding ScanSource or generate 18.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
TotalEnergies SE vs. ScanSource
Performance |
| Timeline |
| TotalEnergies SE |
| ScanSource |
TotalEnergies and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TotalEnergies and ScanSource
The main advantage of trading using opposite TotalEnergies and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TotalEnergies position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource's long position.| TotalEnergies vs. ScanSource | TotalEnergies vs. CI GAMES SA | TotalEnergies vs. QINGCI GAMES INC | TotalEnergies vs. PENN NATL GAMING |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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