Correlation Between ScanSource and TUI AG

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

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

Diversification Opportunities for ScanSource and TUI AG

-0.3

Correlation Coefficient

ScanSource  TUI AG

Very good diversification

The 3 months correlation between ScanSource and TUI is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and TUI AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TUI AG 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 TUI AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TUI AG has no effect on the direction of ScanSource i.e., ScanSource and TUI AG go up and down completely randomly.

Pair Corralation between ScanSource and TUI AG

Assuming the 90 days horizon ScanSource is expected to under-perform the TUI AG. But the stock apears to be less risky and, when comparing its historical volatility, ScanSource is 1.69 times less risky than TUI AG. The stock trades about -0.05 of its potential returns per unit of risk. The TUI AG is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  760.00  in TUI AG on May 13, 2025 and sell it today you would earn a total of  22.00  from holding TUI AG or generate 2.89% return on investment over 90 days.

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

ScanSource  vs.  TUI AG

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 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.

TUI AG

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TUI AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, TUI AG is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ScanSource and TUI AG

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

The idea behind ScanSource and TUI AG 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.