Correlation Between ScanSource and RDE,

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

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

Diversification Opportunities for ScanSource and RDE,

-0.77

Correlation Coefficient

ScanSource  RDE,

Pay attention - limited upside

The 3 months correlation between ScanSource and RDE, is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and RDE, Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RDE, Inc 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 RDE,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RDE, Inc has no effect on the direction of ScanSource i.e., ScanSource and RDE, go up and down completely randomly.

Pair Corralation between ScanSource and RDE,

Given the investment horizon of 90 days ScanSource is expected to under-perform the RDE,. But the stock apears to be less risky and, when comparing its historical volatility, ScanSource is 2.91 times less risky than RDE,. The stock trades about -0.18 of its potential returns per unit of risk. The RDE, Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  105.00  in RDE, Inc on December 29, 2024 and sell it today you would earn a total of  105.00  from holding RDE, Inc or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

ScanSource  vs.  RDE, Inc

ScanSource

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 weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

RDE, Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RDE, Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, RDE, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ScanSource and RDE,

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

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