Correlation Between ScanSource and Insight Enterprises

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

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

Diversification Opportunities for ScanSource and Insight Enterprises

0.61

Correlation Coefficient

ScanSource  Insight Enterprises

Poor diversification

The 3 months correlation between ScanSource and Insight is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Insight Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insight Enterprises 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 Insight Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insight Enterprises has no effect on the direction of ScanSource i.e., ScanSource and Insight Enterprises go up and down completely randomly.

Pair Corralation between ScanSource and Insight Enterprises

Given the investment horizon of 90 days ScanSource is expected to generate 0.54 times more return on investment than Insight Enterprises. However, ScanSource is 1.84 times less risky than Insight Enterprises. It trades about 0.03 of its potential returns per unit of risk. Insight Enterprises is currently generating about -0.04 per unit of risk. If you would invest  4,068  in ScanSource on May 14, 2025 and sell it today you would earn a total of  88.00  from holding ScanSource or generate 2.16% return on investment over 90 days.

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

ScanSource  vs.  Insight Enterprises

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.

Insight Enterprises

Risk-Adjusted Performance

Weakest

Over the last 90 days Insight Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with ScanSource and Insight Enterprises

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

The idea behind ScanSource and Insight Enterprises 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.