Correlation Between 1ST QUANTUM and ScanSource

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

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

Diversification Opportunities for 1ST QUANTUM and ScanSource

0.41

Correlation Coefficient

1ST QUANTUM  ScanSource

Very weak diversification

The 3 months correlation between 1ST and ScanSource is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding 1ST QUANTUM MINLS and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and 1ST QUANTUM 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 1ST QUANTUM MINLS 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 1ST QUANTUM i.e., 1ST QUANTUM and ScanSource go up and down completely randomly.

Pair Corralation between 1ST QUANTUM and ScanSource

Assuming the 90 days trading horizon 1ST QUANTUM MINLS is expected to generate 1.13 times more return on investment than ScanSource. However, 1ST QUANTUM is 1.13 times more volatile than ScanSource. It trades about 0.14 of its potential returns per unit of risk. ScanSource is currently generating about 0.14 per unit of risk. If you would invest  1,202  in 1ST QUANTUM MINLS on May 2, 2025 and sell it today you would earn a total of  245.00  from holding 1ST QUANTUM MINLS or generate 20.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

1ST QUANTUM MINLS  vs.  ScanSource

1ST QUANTUM MINLS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 1ST QUANTUM MINLS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, 1ST QUANTUM unveiled solid returns over the last few months and may actually be approaching a breakup point.

ScanSource

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ScanSource reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 1ST QUANTUM and ScanSource

The main advantage of trading using opposite 1ST QUANTUM and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1ST QUANTUM 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 1ST QUANTUM MINLS 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.