Correlation Between SCANSOURCE (SC3SG) and WESTERN LITHIUM

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

By analyzing existing cross correlation between SCANSOURCE and WESTERN LITHIUM USA, you can compare the effects of market volatilities on SCANSOURCE (SC3SG) and WESTERN LITHIUM 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 WESTERN LITHIUM. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANSOURCE (SC3SG) and WESTERN LITHIUM.

Diversification Opportunities for SCANSOURCE (SC3SG) and WESTERN LITHIUM

0.0

Correlation Coefficient

SCANSOURCE (SC3SG)  WESTERN LITHIUM

Pay attention - limited upside

The 3 months correlation between SCANSOURCE and WESTERN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SCANSOURCE and WESTERN LITHIUM USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTERN LITHIUM USA 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 WESTERN LITHIUM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESTERN LITHIUM USA has no effect on the direction of SCANSOURCE (SC3SG) i.e., SCANSOURCE (SC3SG) and WESTERN LITHIUM go up and down completely randomly.

Pair Corralation between SCANSOURCE (SC3SG) and WESTERN LITHIUM

If you would invest  0.00  in WESTERN LITHIUM USA on December 23, 2024 and sell it today you would earn a total of  0.00  from holding WESTERN LITHIUM USA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

SCANSOURCE  vs.  WESTERN LITHIUM USA

SCANSOURCE (SC3SG)

Risk-Adjusted Performance

Very Weak

Over the last 90 days SCANSOURCE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

WESTERN LITHIUM USA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with SCANSOURCE (SC3SG) and WESTERN LITHIUM

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

The idea behind SCANSOURCE and WESTERN LITHIUM USA 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.