Correlation Between Chimerix and ScanSource

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

By analyzing existing cross correlation between Chimerix and ScanSource, you can compare the effects of market volatilities on Chimerix and ScanSource 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 Chimerix with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chimerix and ScanSource.

Diversification Opportunities for Chimerix and ScanSource

-0.73

Correlation Coefficient

Chimerix  ScanSource

Pay attention - limited upside

The 3 months correlation between Chimerix and ScanSource is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Chimerix and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and Chimerix 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 Chimerix are associated (or correlated) with ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Chimerix i.e., Chimerix and ScanSource go up and down completely randomly.

Pair Corralation between Chimerix and ScanSource

Given the investment horizon of 90 days Chimerix is expected to generate 3.39 times more return on investment than ScanSource. However, Chimerix is 3.39 times more volatile than ScanSource. It trades about 0.27 of its potential returns per unit of risk. ScanSource is currently generating about -0.51 per unit of risk. If you would invest  411.00  in Chimerix on December 1, 2024 and sell it today you would earn a total of  114.00  from holding Chimerix or generate 27.74% return on investment over 90 days.

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

Chimerix  vs.  ScanSource

Chimerix

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chimerix are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Chimerix showed solid returns over the last few months and may actually be approaching a breakup point.

ScanSource

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 weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Chimerix and ScanSource

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

The idea behind Chimerix 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.