Correlation Between KION Group and ScanSource

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

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

Diversification Opportunities for KION Group and ScanSource

0.1

Correlation Coefficient

KION Group  ScanSource

Average diversification

The 3 months correlation between KION and ScanSource is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding KION Group AG and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and KION Group 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 KION Group AG 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 KION Group i.e., KION Group and ScanSource go up and down completely randomly.

Pair Corralation between KION Group and ScanSource

Assuming the 90 days horizon KION Group AG is expected to generate 1.12 times more return on investment than ScanSource. However, KION Group is 1.12 times more volatile than ScanSource. It trades about 0.28 of its potential returns per unit of risk. ScanSource is currently generating about 0.05 per unit of risk. If you would invest  4,032  in KION Group AG on May 25, 2025 and sell it today you would earn a total of  1,748  from holding KION Group AG or generate 43.35% return on investment over 90 days.

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

KION Group AG  vs.  ScanSource

KION Group AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KION Group AG are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, KION Group reported solid returns over the last few months and may actually be approaching a breakup point.

ScanSource

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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 KION Group and ScanSource

The main advantage of trading using opposite KION Group and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KION Group 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 KION Group AG 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.