Correlation Between SCANSOURCE and Media

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

By analyzing existing cross correlation between SCANSOURCE and Media and Games, you can compare the effects of market volatilities on SCANSOURCE and Media 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 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANSOURCE and Media.

Diversification Opportunities for SCANSOURCE and Media

0.26

Correlation Coefficient

SCANSOURCE  Media

Modest diversification

The 3 months correlation between SCANSOURCE and Media is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SCANSOURCE and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of SCANSOURCE i.e., SCANSOURCE and Media go up and down completely randomly.

Pair Corralation between SCANSOURCE and Media

Assuming the 90 days trading horizon SCANSOURCE is expected to generate 0.51 times more return on investment than Media. However, SCANSOURCE is 1.95 times less risky than Media. It trades about 0.18 of its potential returns per unit of risk. Media and Games is currently generating about 0.06 per unit of risk. If you would invest  2,740  in SCANSOURCE on April 22, 2025 and sell it today you would earn a total of  720.00  from holding SCANSOURCE or generate 26.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.63%
Values	Daily Returns

SCANSOURCE  vs.  Media and Games

SCANSOURCE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SCANSOURCE are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SCANSOURCE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Media and Games

Risk-Adjusted Performance

Insignificant

Over the last 90 days Media and Games has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Media reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SCANSOURCE and Media

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

The idea behind SCANSOURCE and Media and Games 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.