Correlation Between Allianz SE and SCANSOURCE (SC3SG)

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

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

Diversification Opportunities for Allianz SE and SCANSOURCE (SC3SG)

0.19

Correlation Coefficient

Allianz SE  SCANSOURCE (SC3SG)

Average diversification

The 3 months correlation between Allianz and SCANSOURCE is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Allianz SE VNA and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE (SC3SG) and Allianz SE 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 Allianz SE VNA 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 Allianz SE i.e., Allianz SE and SCANSOURCE (SC3SG) go up and down completely randomly.

Pair Corralation between Allianz SE and SCANSOURCE (SC3SG)

Assuming the 90 days trading horizon Allianz SE is expected to generate 1.25 times less return on investment than SCANSOURCE (SC3SG). But when comparing it to its historical volatility, Allianz SE VNA is 2.22 times less risky than SCANSOURCE (SC3SG). It trades about 0.09 of its potential returns per unit of risk. SCANSOURCE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,980  in SCANSOURCE on October 11, 2024 and sell it today you would earn a total of  1,620  from holding SCANSOURCE or generate 54.36% return on investment over 90 days.

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

Allianz SE VNA  vs.  SCANSOURCE

Allianz SE VNA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allianz SE VNA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Allianz SE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

SCANSOURCE (SC3SG)

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SCANSOURCE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, SCANSOURCE (SC3SG) may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Allianz SE and SCANSOURCE (SC3SG)

The main advantage of trading using opposite Allianz SE and SCANSOURCE (SC3SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz SE 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 Allianz SE VNA 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.