Correlation Between ScanSource and Daily Journal

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

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

Diversification Opportunities for ScanSource and Daily Journal

0.44

Correlation Coefficient

ScanSource  Daily Journal

Very weak diversification

The 3 months correlation between ScanSource and Daily is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Daily Journal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daily Journal Corp 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 Daily Journal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daily Journal Corp has no effect on the direction of ScanSource i.e., ScanSource and Daily Journal go up and down completely randomly.

Pair Corralation between ScanSource and Daily Journal

Given the investment horizon of 90 days ScanSource is expected to generate 0.72 times more return on investment than Daily Journal. However, ScanSource is 1.4 times less risky than Daily Journal. It trades about 0.08 of its potential returns per unit of risk. Daily Journal Corp is currently generating about 0.05 per unit of risk. If you would invest  3,958  in ScanSource on May 21, 2025 and sell it today you would earn a total of  348.00  from holding ScanSource or generate 8.79% return on investment over 90 days.

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

ScanSource  vs.  Daily Journal Corp

ScanSource

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ScanSource may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Daily Journal Corp

Risk-Adjusted Performance

Weakest

Compared to the overall equity markets, risk-adjusted returns on investments in Daily Journal Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Daily Journal may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with ScanSource and Daily Journal

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

The idea behind ScanSource and Daily Journal Corp 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.