Correlation Between ScanSource and ADEIA P

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

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

Diversification Opportunities for ScanSource and ADEIA P

0.65

Correlation Coefficient

ScanSource  ADEIA P

Poor diversification

The 3 months correlation between ScanSource and ADEIA is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and ADEIA P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADEIA P 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 ADEIA P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADEIA P has no effect on the direction of ScanSource i.e., ScanSource and ADEIA P go up and down completely randomly.

Pair Corralation between ScanSource and ADEIA P

Given the investment horizon of 90 days ScanSource is expected to generate 0.84 times more return on investment than ADEIA P. However, ScanSource is 1.19 times less risky than ADEIA P. It trades about 0.23 of its potential returns per unit of risk. ADEIA P is currently generating about 0.13 per unit of risk. If you would invest  3,149  in ScanSource on April 22, 2025 and sell it today you would earn a total of  895.00  from holding ScanSource or generate 28.42% return on investment over 90 days.

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

ScanSource  vs.  ADEIA P

ScanSource

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ScanSource exhibited solid returns over the last few months and may actually be approaching a breakup point.

ADEIA P

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ADEIA P are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, ADEIA P sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ScanSource and ADEIA P

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

The idea behind ScanSource and ADEIA P 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.