Correlation Between 191241AF5 and ScanSource

Can any of the company-specific risk be diversified away by investing in both 191241AF5 and ScanSource 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 191241AF5 and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COCA COLA FEMSA S and ScanSource, you can compare the effects of market volatilities on 191241AF5 and ScanSource 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 191241AF5 with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of 191241AF5 and ScanSource.

Diversification Opportunities for 191241AF5 and ScanSource

0.34

Correlation Coefficient

191241AF5  ScanSource

Weak diversification

The 3 months correlation between 191241AF5 and ScanSource is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding COCA COLA FEMSA S and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and 191241AF5 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 COCA COLA FEMSA S are associated (or correlated) with ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of 191241AF5 i.e., 191241AF5 and ScanSource go up and down completely randomly.

Pair Corralation between 191241AF5 and ScanSource

Assuming the 90 days trading horizon COCA COLA FEMSA S is expected to generate 43.54 times more return on investment than ScanSource. However, 191241AF5 is 43.54 times more volatile than ScanSource. It trades about 0.08 of its potential returns per unit of risk. ScanSource is currently generating about 0.05 per unit of risk. If you would invest  10,349  in COCA COLA FEMSA S on October 26, 2024 and sell it today you would lose (892.00) from holding COCA COLA FEMSA S or give up 8.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	25.1%
Values	Daily Returns

COCA COLA FEMSA S  vs.  ScanSource

COCA A FEMSA

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days COCA COLA FEMSA S has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for COCA COLA FEMSA S investors.

ScanSource

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, ScanSource exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 191241AF5 and ScanSource

The main advantage of trading using opposite 191241AF5 and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 191241AF5 position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource's long position.

The idea behind COCA COLA FEMSA S and ScanSource 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..