Correlation Between SCANSOURCE (SC3SG) and FARM 51

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Can any of the company-specific risk be diversified away by investing in both SCANSOURCE (SC3SG) and FARM 51 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 FARM 51 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANSOURCE and FARM 51 GROUP, you can compare the effects of market volatilities on SCANSOURCE (SC3SG) and FARM 51 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 FARM 51. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANSOURCE (SC3SG) and FARM 51.

Diversification Opportunities for SCANSOURCE (SC3SG) and FARM 51

SCANSOURCEFARMDiversified AwaySCANSOURCEFARMDiversified Away100%
-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between SCANSOURCE and FARM is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding SCANSOURCE and FARM 51 GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARM 51 GROUP 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 FARM 51. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARM 51 GROUP has no effect on the direction of SCANSOURCE (SC3SG) i.e., SCANSOURCE (SC3SG) and FARM 51 go up and down completely randomly.

Pair Corralation between SCANSOURCE (SC3SG) and FARM 51

Assuming the 90 days trading horizon SCANSOURCE is expected to generate 1.05 times more return on investment than FARM 51. However, SCANSOURCE (SC3SG) is 1.05 times more volatile than FARM 51 GROUP. It trades about 0.1 of its potential returns per unit of risk. FARM 51 GROUP is currently generating about -0.04 per unit of risk. If you would invest  4,220  in SCANSOURCE on October 23, 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 Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SCANSOURCE  vs.  FARM 51 GROUP

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -10-5051015
JavaScript chart by amCharts 3.21.15SC3 F51
       Timeline  
SCANSOURCE (SC3SG) 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
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. In spite of comparatively fragile basic indicators, SCANSOURCE (SC3SG) unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan404244464850
FARM 51 GROUP 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days FARM 51 GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2.82.933.13.2

SCANSOURCE (SC3SG) and FARM 51 Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.54-5.65-3.75-1.860.03271.963.925.887.84 0.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15SC3 F51
       Returns  

Pair Trading with SCANSOURCE (SC3SG) and FARM 51

The main advantage of trading using opposite SCANSOURCE (SC3SG) and FARM 51 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANSOURCE (SC3SG) position performs unexpectedly, FARM 51 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 FARM 51 will offset losses from the drop in FARM 51's long position.
The idea behind SCANSOURCE and FARM 51 GROUP 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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