Correlation Between ScanSource and Drinks Americas

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

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

Diversification Opportunities for ScanSource and Drinks Americas

0.0

Correlation Coefficient

ScanSource  Drinks Americas

Pay attention - limited upside

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

Pair Corralation between ScanSource and Drinks Americas

If you would invest  0.01  in Drinks Americas Hldg on September 18, 2025 and sell it today you would earn a total of  0.00  from holding Drinks Americas Hldg or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

ScanSource  vs.  Drinks Americas Hldg

ScanSource

Risk-Adjusted Performance

Weakest

Over the last 90 days ScanSource has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ScanSource is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Drinks Americas Hldg

Risk-Adjusted Performance

Weakest

Over the last 90 days Drinks Americas Hldg has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Drinks Americas is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ScanSource and Drinks Americas

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

The idea behind ScanSource and Drinks Americas Hldg 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.