Correlation Between ScanSource and GATX

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

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

Diversification Opportunities for ScanSource and GATX

0.65

Correlation Coefficient

ScanSource  GATX

Poor diversification

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

Pair Corralation between ScanSource and GATX

Given the investment horizon of 90 days ScanSource is expected to generate 1.25 times less return on investment than GATX. But when comparing it to its historical volatility, ScanSource is 1.0 times less risky than GATX. It trades about 0.03 of its potential returns per unit of risk. GATX Corporation is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  14,843  in GATX Corporation on May 14, 2025 and sell it today you would earn a total of  432.00  from holding GATX Corporation or generate 2.91% return on investment over 90 days.

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

ScanSource  vs.  GATX Corp.

ScanSource

Risk-Adjusted Performance

Weak

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

GATX

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GATX Corporation are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, GATX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ScanSource and GATX

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

The idea behind ScanSource and GATX Corporation 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.