Correlation Between ECD Automotive and ScanSource
Can any of the company-specific risk be diversified away by investing in both ECD Automotive 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 ECD Automotive and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECD Automotive Design and ScanSource, you can compare the effects of market volatilities on ECD Automotive 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 ECD Automotive with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECD Automotive and ScanSource.
Diversification Opportunities for ECD Automotive and ScanSource
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between ECD and ScanSource is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ECD Automotive Design and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and ECD Automotive 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 ECD Automotive Design 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 ECD Automotive i.e., ECD Automotive and ScanSource go up and down completely randomly.
Pair Corralation between ECD Automotive and ScanSource
Given the investment horizon of 90 days ECD Automotive Design is expected to under-perform the ScanSource. In addition to that, ECD Automotive is 5.06 times more volatile than ScanSource. It trades about -0.08 of its total potential returns per unit of risk. ScanSource is currently generating about 0.05 per unit of volatility. If you would invest 3,592 in ScanSource on May 6, 2025 and sell it today you would earn a total of 186.00 from holding ScanSource or generate 5.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ECD Automotive Design vs. ScanSource
Performance |
Timeline |
ECD Automotive Design |
ScanSource |
ECD Automotive and ScanSource Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ECD Automotive and ScanSource
The main advantage of trading using opposite ECD Automotive and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECD Automotive 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.ECD Automotive vs. CompoSecure | ECD Automotive vs. Vistra Energy Corp | ECD Automotive vs. Enlight Renewable Energy | ECD Automotive vs. Austin Gold Corp |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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