Correlation Between Lyxor 1 and ScanSource

Can any of the company-specific risk be diversified away by investing in both Lyxor 1 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 Lyxor 1 and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lyxor 1 and ScanSource, you can compare the effects of market volatilities on Lyxor 1 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 Lyxor 1 with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and ScanSource.

Diversification Opportunities for Lyxor 1 and ScanSource

0.11

Correlation Coefficient

Lyxor 1  ScanSource

Average diversification

The 3 months correlation between Lyxor and ScanSource is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and Lyxor 1 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 Lyxor 1 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 Lyxor 1 i.e., Lyxor 1 and ScanSource go up and down completely randomly.

Pair Corralation between Lyxor 1 and ScanSource

Assuming the 90 days trading horizon Lyxor 1 is expected to under-perform the ScanSource. But the etf apears to be less risky and, when comparing its historical volatility, Lyxor 1 is 2.48 times less risky than ScanSource. The etf trades about -0.04 of its potential returns per unit of risk. The ScanSource is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,460  in ScanSource on May 26, 2025 and sell it today you would lose (40.00) from holding ScanSource or give up 1.16% of portfolio value over 90 days.

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

Lyxor 1   vs.  ScanSource

Lyxor 1

Risk-Adjusted Performance

Weakest

Over the last 90 days Lyxor 1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Lyxor 1 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

ScanSource

Risk-Adjusted Performance

Weakest

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

Pair Trading with Lyxor 1 and ScanSource

The main advantage of trading using opposite Lyxor 1 and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 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 Lyxor 1 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.