Correlation Between ScanSource and ALLIANZ SE

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

By analyzing existing cross correlation between ScanSource and ALLIANZ SE UNSPADR, you can compare the effects of market volatilities on ScanSource and ALLIANZ SE 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 ALLIANZ SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and ALLIANZ SE.

Diversification Opportunities for ScanSource and ALLIANZ SE

0.33

Correlation Coefficient

ScanSource  ALLIANZ SE

Weak diversification

The 3 months correlation between ScanSource and ALLIANZ is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and ALLIANZ SE UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLIANZ SE UNSPADR 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 ALLIANZ SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLIANZ SE UNSPADR has no effect on the direction of ScanSource i.e., ScanSource and ALLIANZ SE go up and down completely randomly.

Pair Corralation between ScanSource and ALLIANZ SE

Assuming the 90 days horizon ScanSource is expected to generate 1.79 times more return on investment than ALLIANZ SE. However, ScanSource is 1.79 times more volatile than ALLIANZ SE UNSPADR. It trades about 0.1 of its potential returns per unit of risk. ALLIANZ SE UNSPADR is currently generating about 0.09 per unit of risk. If you would invest  4,220  in ScanSource on October 24, 2024 and sell it today you would earn a total of  600.00  from holding ScanSource or generate 14.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

ScanSource  vs.  ALLIANZ SE UNSPADR

ScanSource

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ScanSource reported solid returns over the last few months and may actually be approaching a breakup point.

ALLIANZ SE UNSPADR

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ALLIANZ SE UNSPADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ALLIANZ SE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ScanSource and ALLIANZ SE

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

The idea behind ScanSource and ALLIANZ SE UNSPADR 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.