Correlation Between Vivendi SE and ScanSource

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Can any of the company-specific risk be diversified away by investing in both Vivendi SE 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 Vivendi SE and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vivendi SE and ScanSource, you can compare the effects of market volatilities on Vivendi SE 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 Vivendi SE with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vivendi SE and ScanSource.

Diversification Opportunities for Vivendi SE and ScanSource

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between Vivendi and ScanSource is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Vivendi SE and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and Vivendi SE 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 Vivendi SE 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 Vivendi SE i.e., Vivendi SE and ScanSource go up and down completely randomly.

Pair Corralation between Vivendi SE and ScanSource

Assuming the 90 days trading horizon Vivendi SE is expected to generate 1.75 times less return on investment than ScanSource. In addition to that, Vivendi SE is 1.8 times more volatile than ScanSource. It trades about 0.08 of its total potential returns per unit of risk. ScanSource is currently generating about 0.26 per unit of volatility. If you would invest  4,560  in ScanSource on October 23, 2024 and sell it today you would earn a total of  280.00  from holding ScanSource or generate 6.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy94.12%
ValuesDaily Returns

Vivendi SE  vs.  ScanSource

 Performance 
       Timeline  
Vivendi SE 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ScanSource reported solid returns over the last few months and may actually be approaching a breakup point.

Vivendi SE and ScanSource Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vivendi SE and ScanSource

The main advantage of trading using opposite Vivendi SE and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vivendi SE 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 Vivendi SE 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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