Correlation Between ScanSource and Yoshitsu

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

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

Diversification Opportunities for ScanSource and Yoshitsu

0.82

Correlation Coefficient

ScanSource  Yoshitsu

Very poor diversification

The 3 months correlation between ScanSource and Yoshitsu is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Yoshitsu Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yoshitsu 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 Yoshitsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yoshitsu has no effect on the direction of ScanSource i.e., ScanSource and Yoshitsu go up and down completely randomly.

Pair Corralation between ScanSource and Yoshitsu

Given the investment horizon of 90 days ScanSource is expected to generate 0.81 times more return on investment than Yoshitsu. However, ScanSource is 1.24 times less risky than Yoshitsu. It trades about 0.24 of its potential returns per unit of risk. Yoshitsu Co Ltd is currently generating about 0.17 per unit of risk. If you would invest  3,122  in ScanSource on April 21, 2025 and sell it today you would earn a total of  931.00  from holding ScanSource or generate 29.82% return on investment over 90 days.

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

ScanSource  vs.  Yoshitsu Co Ltd

ScanSource

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ScanSource exhibited solid returns over the last few months and may actually be approaching a breakup point.

Yoshitsu

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yoshitsu Co Ltd are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Yoshitsu reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ScanSource and Yoshitsu

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

The idea behind ScanSource and Yoshitsu Co Ltd 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.