Correlation Between Amphenol and ScanSource

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

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

Diversification Opportunities for Amphenol and ScanSource

-0.31

Correlation Coefficient

Amphenol  ScanSource

Very good diversification

The 3 months correlation between Amphenol and ScanSource is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Amphenol and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and Amphenol 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 Amphenol 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 Amphenol i.e., Amphenol and ScanSource go up and down completely randomly.

Pair Corralation between Amphenol and ScanSource

Considering the 90-day investment horizon Amphenol is expected to generate 0.74 times more return on investment than ScanSource. However, Amphenol is 1.35 times less risky than ScanSource. It trades about 0.35 of its potential returns per unit of risk. ScanSource is currently generating about 0.02 per unit of risk. If you would invest  8,431  in Amphenol on May 12, 2025 and sell it today you would earn a total of  2,567  from holding Amphenol or generate 30.45% return on investment over 90 days.

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

Amphenol  vs.  ScanSource

Amphenol

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Amphenol are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Amphenol demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ScanSource

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, ScanSource is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Amphenol and ScanSource

The main advantage of trading using opposite Amphenol and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amphenol 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 Amphenol 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.