Correlation Between ScanSource and Fielmann Aktiengesellscha

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

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

Diversification Opportunities for ScanSource and Fielmann Aktiengesellscha

-0.71

Correlation Coefficient

ScanSource  Fielmann Aktiengesellscha

Pay attention - limited upside

The 3 months correlation between ScanSource and Fielmann is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Fielmann Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fielmann Aktiengesellscha 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 Fielmann Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fielmann Aktiengesellscha has no effect on the direction of ScanSource i.e., ScanSource and Fielmann Aktiengesellscha go up and down completely randomly.

Pair Corralation between ScanSource and Fielmann Aktiengesellscha

Assuming the 90 days horizon ScanSource is expected to generate 1.87 times more return on investment than Fielmann Aktiengesellscha. However, ScanSource is 1.87 times more volatile than Fielmann Aktiengesellschaft. It trades about 0.06 of its potential returns per unit of risk. Fielmann Aktiengesellschaft is currently generating about -0.04 per unit of risk. If you would invest  3,580  in ScanSource on September 25, 2024 and sell it today you would earn a total of  1,120  from holding ScanSource or generate 31.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

ScanSource  vs.  Fielmann Aktiengesellschaft

ScanSource

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 6 (%) 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.

Fielmann Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fielmann Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with ScanSource and Fielmann Aktiengesellscha

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

The idea behind ScanSource and Fielmann Aktiengesellschaft 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.