Correlation Between SCANSOURCE (SC3SG) and ANGLO ASIAN

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

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

Diversification Opportunities for SCANSOURCE (SC3SG) and ANGLO ASIAN

-0.48

Correlation Coefficient

SCANSOURCE (SC3SG)  ANGLO ASIAN

Very good diversification

The 3 months correlation between SCANSOURCE and ANGLO is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding SCANSOURCE and ANGLO ASIAN MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGLO ASIAN MINING and SCANSOURCE (SC3SG) 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 ANGLO ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGLO ASIAN MINING has no effect on the direction of SCANSOURCE (SC3SG) i.e., SCANSOURCE (SC3SG) and ANGLO ASIAN go up and down completely randomly.

Pair Corralation between SCANSOURCE (SC3SG) and ANGLO ASIAN

Assuming the 90 days trading horizon SCANSOURCE is expected to generate 1.03 times more return on investment than ANGLO ASIAN. However, SCANSOURCE (SC3SG) is 1.03 times more volatile than ANGLO ASIAN MINING. It trades about 0.05 of its potential returns per unit of risk. ANGLO ASIAN MINING is currently generating about 0.0 per unit of risk. If you would invest  4,320  in SCANSOURCE on October 10, 2024 and sell it today you would earn a total of  220.00  from holding SCANSOURCE or generate 5.09% 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.  ANGLO ASIAN MINING

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 uncertain basic indicators, SCANSOURCE (SC3SG) may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ANGLO ASIAN MINING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANGLO ASIAN MINING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ANGLO ASIAN is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SCANSOURCE (SC3SG) and ANGLO ASIAN

The main advantage of trading using opposite SCANSOURCE (SC3SG) and ANGLO ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANSOURCE (SC3SG) position performs unexpectedly, ANGLO ASIAN 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 ANGLO ASIAN will offset losses from the drop in ANGLO ASIAN's long position.

The idea behind SCANSOURCE and ANGLO ASIAN MINING 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.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.