Correlation Between ScanSource and Arena Group
Can any of the company-specific risk be diversified away by investing in both ScanSource and Arena Group 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 Arena Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Arena Group Holdings, you can compare the effects of market volatilities on ScanSource and Arena Group 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 Arena Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Arena Group.
Diversification Opportunities for ScanSource and Arena Group
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ScanSource and Arena is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Arena Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Group Holdings 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 Arena Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Group Holdings has no effect on the direction of ScanSource i.e., ScanSource and Arena Group go up and down completely randomly.
Pair Corralation between ScanSource and Arena Group
Given the investment horizon of 90 days ScanSource is expected to generate 2.24 times less return on investment than Arena Group. But when comparing it to its historical volatility, ScanSource is 5.51 times less risky than Arena Group. It trades about 0.21 of its potential returns per unit of risk. Arena Group Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 487.00 in Arena Group Holdings on April 25, 2025 and sell it today you would earn a total of 120.00 from holding Arena Group Holdings or generate 24.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ScanSource vs. Arena Group Holdings
Performance |
Timeline |
ScanSource |
Arena Group Holdings |
ScanSource and Arena Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ScanSource and Arena Group
The main advantage of trading using opposite ScanSource and Arena Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Arena Group 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 Arena Group will offset losses from the drop in Arena Group's long position.ScanSource vs. PC Connection | ScanSource vs. Insight Enterprises | ScanSource vs. Climb Global Solutions | ScanSource vs. Synnex |
Arena Group vs. Agrieuro Corp | Arena Group vs. Cerberus Cyber Sentinel | Arena Group vs. Alta Equipment Group | Arena Group vs. AN2 Therapeutics |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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