Correlation Between ScanSource and ADRIATIC METALS

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

By analyzing existing cross correlation between ScanSource and ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on ScanSource and ADRIATIC METALS 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 ScanSource with a short position of ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and ADRIATIC METALS.

Diversification Opportunities for ScanSource and ADRIATIC METALS

-0.4

Correlation Coefficient

ScanSource  ADRIATIC METALS

Very good diversification

The 3 months correlation between ScanSource and ADRIATIC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS and ScanSource 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 ScanSource are associated (or correlated) with ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of ScanSource i.e., ScanSource and ADRIATIC METALS go up and down completely randomly.

Pair Corralation between ScanSource and ADRIATIC METALS

Assuming the 90 days horizon ScanSource is expected to under-perform the ADRIATIC METALS. But the stock apears to be less risky and, when comparing its historical volatility, ScanSource is 3.02 times less risky than ADRIATIC METALS. The stock trades about -0.09 of its potential returns per unit of risk. The ADRIATIC METALS LS 013355 is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  212.00  in ADRIATIC METALS LS 013355 on May 14, 2025 and sell it today you would earn a total of  116.00  from holding ADRIATIC METALS LS 013355 or generate 54.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ScanSource  vs.  ADRIATIC METALS LS 013355

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 latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ADRIATIC METALS LS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ADRIATIC METALS LS 013355 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ADRIATIC METALS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ScanSource and ADRIATIC METALS

The main advantage of trading using opposite ScanSource and ADRIATIC METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, ADRIATIC METALS 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 ADRIATIC METALS will offset losses from the drop in ADRIATIC METALS's long position.

The idea behind ScanSource and ADRIATIC METALS LS 013355 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.