Correlation Between EVS Broadcast and SCANSOURCE (SC3SG)

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

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

Diversification Opportunities for EVS Broadcast and SCANSOURCE (SC3SG)

-0.89

Correlation Coefficient

EVS Broadcast  SCANSOURCE (SC3SG)

Pay attention - limited upside

The 3 months correlation between EVS and SCANSOURCE is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE (SC3SG) and EVS Broadcast 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 EVS Broadcast Equipment 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 EVS Broadcast i.e., EVS Broadcast and SCANSOURCE (SC3SG) go up and down completely randomly.

Pair Corralation between EVS Broadcast and SCANSOURCE (SC3SG)

Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 0.7 times more return on investment than SCANSOURCE (SC3SG). However, EVS Broadcast Equipment is 1.43 times less risky than SCANSOURCE (SC3SG). It trades about 0.22 of its potential returns per unit of risk. SCANSOURCE is currently generating about -0.2 per unit of risk. If you would invest  3,095  in EVS Broadcast Equipment on December 23, 2024 and sell it today you would earn a total of  735.00  from holding EVS Broadcast Equipment or generate 23.75% return on investment over 90 days.

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

EVS Broadcast Equipment  vs.  SCANSOURCE

EVS Broadcast Equipment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EVS Broadcast Equipment are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, EVS Broadcast unveiled solid returns over the last few months and may actually be approaching a breakup point.

SCANSOURCE (SC3SG)

Risk-Adjusted Performance

Very Weak

Over the last 90 days SCANSOURCE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with EVS Broadcast and SCANSOURCE (SC3SG)

The main advantage of trading using opposite EVS Broadcast and SCANSOURCE (SC3SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast 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 EVS Broadcast Equipment 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.