Correlation Between ScanSource and Marchex
Can any of the company-specific risk be diversified away by investing in both ScanSource and Marchex 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 Marchex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Marchex, you can compare the effects of market volatilities on ScanSource and Marchex 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 Marchex. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Marchex.
Diversification Opportunities for ScanSource and Marchex
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ScanSource and Marchex is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Marchex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marchex 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 Marchex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marchex has no effect on the direction of ScanSource i.e., ScanSource and Marchex go up and down completely randomly.
Pair Corralation between ScanSource and Marchex
Given the investment horizon of 90 days ScanSource is expected to generate 1.73 times less return on investment than Marchex. But when comparing it to its historical volatility, ScanSource is 2.33 times less risky than Marchex. It trades about 0.21 of its potential returns per unit of risk. Marchex is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 142.00 in Marchex on April 24, 2025 and sell it today you would earn a total of 60.00 from holding Marchex or generate 42.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
ScanSource vs. Marchex
Performance |
Timeline |
ScanSource |
Marchex |
ScanSource and Marchex Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ScanSource and Marchex
The main advantage of trading using opposite ScanSource and Marchex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Marchex 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 Marchex will offset losses from the drop in Marchex's long position.ScanSource vs. PC Connection | ScanSource vs. Insight Enterprises | ScanSource vs. Climb Global Solutions | ScanSource vs. Synnex |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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