Correlation Between CardieX and ScanSource

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

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

Diversification Opportunities for CardieX and ScanSource

0.0

Correlation Coefficient

CardieX  ScanSource

Pay attention - limited upside

The 3 months correlation between CardieX and ScanSource is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CardieX Limited and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and CardieX 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 CardieX Limited 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 CardieX i.e., CardieX and ScanSource go up and down completely randomly.

Pair Corralation between CardieX and ScanSource

If you would invest  4,158  in ScanSource on February 5, 2024 and sell it today you would earn a total of  129.00  from holding ScanSource or generate 3.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CardieX Limited  vs.  ScanSource

CardieX Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CardieX Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, CardieX is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ScanSource

Risk-Adjusted Performance

6 of 100

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. In spite of rather uncertain basic indicators, ScanSource may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with CardieX and ScanSource

The main advantage of trading using opposite CardieX and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CardieX 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 CardieX Limited 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.