Correlation Between ScanSource and ZhongAn Online
Can any of the company-specific risk be diversified away by investing in both ScanSource and ZhongAn Online 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 ZhongAn Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and ZhongAn Online P, you can compare the effects of market volatilities on ScanSource and ZhongAn Online 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 ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and ZhongAn Online.
Diversification Opportunities for ScanSource and ZhongAn Online
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ScanSource and ZhongAn is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P 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 ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of ScanSource i.e., ScanSource and ZhongAn Online go up and down completely randomly.
Pair Corralation between ScanSource and ZhongAn Online
Assuming the 90 days horizon ScanSource is expected to under-perform the ZhongAn Online. But the stock apears to be less risky and, when comparing its historical volatility, ScanSource is 1.76 times less risky than ZhongAn Online. The stock trades about -0.21 of its potential returns per unit of risk. The ZhongAn Online P is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 143.00 in ZhongAn Online P on December 25, 2024 and sell it today you would earn a total of 14.00 from holding ZhongAn Online P or generate 9.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ScanSource vs. ZhongAn Online P
Performance |
Timeline |
ScanSource |
ZhongAn Online P |
ScanSource and ZhongAn Online Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ScanSource and ZhongAn Online
The main advantage of trading using opposite ScanSource and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.ScanSource vs. BORR DRILLING NEW | ScanSource vs. MeVis Medical Solutions | ScanSource vs. ETFS Coffee ETC | ScanSource vs. PRECISION DRILLING P |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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