Correlation Between ScanSource and Silicom
Can any of the company-specific risk be diversified away by investing in both ScanSource and Silicom 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 Silicom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Silicom, you can compare the effects of market volatilities on ScanSource and Silicom 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 Silicom. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Silicom.
Diversification Opportunities for ScanSource and Silicom
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ScanSource and Silicom is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Silicom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicom 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 Silicom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicom has no effect on the direction of ScanSource i.e., ScanSource and Silicom go up and down completely randomly.
Pair Corralation between ScanSource and Silicom
Given the investment horizon of 90 days ScanSource is expected to generate 0.73 times more return on investment than Silicom. However, ScanSource is 1.36 times less risky than Silicom. It trades about 0.21 of its potential returns per unit of risk. Silicom is currently generating about 0.06 per unit of risk. If you would invest 3,286 in ScanSource on April 26, 2025 and sell it today you would earn a total of 819.00 from holding ScanSource or generate 24.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
ScanSource vs. Silicom
Performance |
Timeline |
ScanSource |
Silicom |
ScanSource and Silicom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ScanSource and Silicom
The main advantage of trading using opposite ScanSource and Silicom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Silicom 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 Silicom will offset losses from the drop in Silicom's long position.ScanSource vs. PC Connection | ScanSource vs. Insight Enterprises | ScanSource vs. Climb Global Solutions | ScanSource vs. Synnex |
Silicom vs. Ituran Location and | Silicom vs. Sapiens International | Silicom vs. Allot Communications | Silicom vs. Radcom |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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