Correlation Between CREO MEDICAL and SCANSOURCE (SC3SG)

Can any of the company-specific risk be diversified away by investing in both CREO MEDICAL and SCANSOURCE (SC3SG) 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 CREO MEDICAL and SCANSOURCE (SC3SG) into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CREO MEDICAL GRP and SCANSOURCE, you can compare the effects of market volatilities on CREO MEDICAL and SCANSOURCE (SC3SG) 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 CREO MEDICAL with a short position of SCANSOURCE (SC3SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and SCANSOURCE (SC3SG).

Diversification Opportunities for CREO MEDICAL and SCANSOURCE (SC3SG)

-0.68

Correlation Coefficient

CREO MEDICAL  SCANSOURCE (SC3SG)

Excellent diversification

The 3 months correlation between CREO and SCANSOURCE is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE (SC3SG) and CREO MEDICAL 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 CREO MEDICAL GRP are associated (or correlated) with SCANSOURCE (SC3SG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANSOURCE (SC3SG) has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and SCANSOURCE (SC3SG) go up and down completely randomly.

Pair Corralation between CREO MEDICAL and SCANSOURCE (SC3SG)

Assuming the 90 days horizon CREO MEDICAL GRP is expected to under-perform the SCANSOURCE (SC3SG). In addition to that, CREO MEDICAL is 2.43 times more volatile than SCANSOURCE. It trades about -0.15 of its total potential returns per unit of risk. SCANSOURCE is currently generating about 0.35 per unit of volatility. If you would invest  4,580  in SCANSOURCE on October 24, 2024 and sell it today you would earn a total of  380.00  from holding SCANSOURCE or generate 8.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

CREO MEDICAL GRP  vs.  SCANSOURCE

CREO MEDICAL GRP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CREO MEDICAL GRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

SCANSOURCE (SC3SG)

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCANSOURCE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SCANSOURCE (SC3SG) unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CREO MEDICAL and SCANSOURCE (SC3SG)

The main advantage of trading using opposite CREO MEDICAL and SCANSOURCE (SC3SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREO MEDICAL position performs unexpectedly, SCANSOURCE (SC3SG) 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 (SC3SG) will offset losses from the drop in SCANSOURCE (SC3SG)'s long position.

The idea behind CREO MEDICAL GRP 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..