Correlation Between SANLAM and ScanSource

Can any of the company-specific risk be diversified away by investing in both SANLAM 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 SANLAM and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SANLAM LTD RC 01 and ScanSource, you can compare the effects of market volatilities on SANLAM 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 SANLAM with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANLAM and ScanSource.

Diversification Opportunities for SANLAM and ScanSource

0.0

Correlation Coefficient

SANLAM  ScanSource

Pay attention - limited upside

The 3 months correlation between SANLAM and ScanSource is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SANLAM LTD RC 01 and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and SANLAM 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 SANLAM LTD RC 01 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 SANLAM i.e., SANLAM and ScanSource go up and down completely randomly.

Pair Corralation between SANLAM and ScanSource

If you would invest  2,700  in ScanSource on April 20, 2025 and sell it today you would earn a total of  760.00  from holding ScanSource or generate 28.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SANLAM LTD RC 01  vs.  ScanSource

SANLAM LTD RC

Risk-Adjusted Performance

Very Weak

Over the last 90 days SANLAM LTD RC 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SANLAM is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ScanSource

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ScanSource reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SANLAM and ScanSource

The main advantage of trading using opposite SANLAM and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANLAM 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.

The idea behind SANLAM LTD RC 01 and ScanSource 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.