Correlation Between BlackRock ESG and ScanSource

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

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

Diversification Opportunities for BlackRock ESG and ScanSource

0.8

Correlation Coefficient

BlackRock ESG  ScanSource

Very poor diversification

The 3 months correlation between BlackRock and ScanSource is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock ESG Capital and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and BlackRock ESG 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 BlackRock ESG Capital 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 BlackRock ESG i.e., BlackRock ESG and ScanSource go up and down completely randomly.

Pair Corralation between BlackRock ESG and ScanSource

Given the investment horizon of 90 days BlackRock ESG is expected to generate 2.12 times less return on investment than ScanSource. But when comparing it to its historical volatility, BlackRock ESG Capital is 2.63 times less risky than ScanSource. It trades about 0.24 of its potential returns per unit of risk. ScanSource is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  3,339  in ScanSource on May 1, 2025 and sell it today you would earn a total of  749.00  from holding ScanSource or generate 22.43% return on investment over 90 days.

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

BlackRock ESG Capital  vs.  ScanSource

BlackRock ESG Capital

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock ESG Capital are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BlackRock ESG may actually be approaching a critical reversion point that can send shares even higher in August 2025.

ScanSource

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ScanSource exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BlackRock ESG and ScanSource

The main advantage of trading using opposite BlackRock ESG and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock ESG 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 BlackRock ESG Capital 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.