Correlation Between Weibo Corp and ScanSource
Can any of the company-specific risk be diversified away by investing in both Weibo Corp 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 Weibo Corp and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and ScanSource, you can compare the effects of market volatilities on Weibo Corp 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 Weibo Corp with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and ScanSource.
Diversification Opportunities for Weibo Corp and ScanSource
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Weibo and ScanSource is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and Weibo Corp 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 Weibo Corp 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 Weibo Corp i.e., Weibo Corp and ScanSource go up and down completely randomly.
Pair Corralation between Weibo Corp and ScanSource
Allowing for the 90-day total investment horizon Weibo Corp is expected to under-perform the ScanSource. But the stock apears to be less risky and, when comparing its historical volatility, Weibo Corp is 1.1 times less risky than ScanSource. The stock trades about -0.07 of its potential returns per unit of risk. The ScanSource is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 4,545 in ScanSource on August 29, 2024 and sell it today you would earn a total of 642.00 from holding ScanSource or generate 14.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. ScanSource
Performance |
| Timeline |
| Weibo Corp |
| ScanSource |
Weibo Corp and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and ScanSource
The main advantage of trading using opposite Weibo Corp and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp 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.| Weibo Corp vs. Alphabet Inc Class C | Weibo Corp vs. Twilio Inc | Weibo Corp vs. Snap Inc | Weibo Corp vs. Baidu Inc |
| ScanSource vs. Climb Global Solutions | ScanSource vs. Insight Enterprises | ScanSource vs. Synnex | ScanSource vs. PC Connection |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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