Correlation Between ScanSource and VANGUARD FUNDS

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

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

Diversification Opportunities for ScanSource and VANGUARD FUNDS

-0.06

Correlation Coefficient

ScanSource  VANGUARD FUNDS

Good diversification

The 3 months correlation between ScanSource and VANGUARD is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and VANGUARD FUNDS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VANGUARD FUNDS PLC 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 VANGUARD FUNDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VANGUARD FUNDS PLC has no effect on the direction of ScanSource i.e., ScanSource and VANGUARD FUNDS go up and down completely randomly.

Pair Corralation between ScanSource and VANGUARD FUNDS

Given the investment horizon of 90 days ScanSource is expected to under-perform the VANGUARD FUNDS. In addition to that, ScanSource is 2.33 times more volatile than VANGUARD FUNDS PLC. It trades about -0.06 of its total potential returns per unit of risk. VANGUARD FUNDS PLC is currently generating about -0.11 per unit of volatility. If you would invest  5,848  in VANGUARD FUNDS PLC on May 10, 2025 and sell it today you would lose (118.00) from holding VANGUARD FUNDS PLC or give up 2.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.3%
Values	Daily Returns

ScanSource  vs.  VANGUARD FUNDS PLC

ScanSource

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 1 (%) 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.

VANGUARD FUNDS PLC

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in VANGUARD FUNDS PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, VANGUARD FUNDS is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ScanSource and VANGUARD FUNDS

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

The idea behind ScanSource and VANGUARD FUNDS PLC 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.