Correlation Between Synnex and ScanSource

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

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

Diversification Opportunities for Synnex and ScanSource

0.28

Correlation Coefficient

Synnex  ScanSource

Modest diversification

The 3 months correlation between Synnex and ScanSource is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Synnex and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and Synnex 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 Synnex are associated (or correlated) with ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Synnex i.e., Synnex and ScanSource go up and down completely randomly.

Pair Corralation between Synnex and ScanSource

Considering the 90-day investment horizon Synnex is expected to generate 0.94 times more return on investment than ScanSource. However, Synnex is 1.07 times less risky than ScanSource. It trades about 0.18 of its potential returns per unit of risk. ScanSource is currently generating about -0.01 per unit of risk. If you would invest  12,453  in Synnex on May 13, 2025 and sell it today you would earn a total of  2,178  from holding Synnex or generate 17.49% return on investment over 90 days.

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

Synnex  vs.  ScanSource

Synnex

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Synnex are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Synnex showed solid returns over the last few months and may actually be approaching a breakup point.

ScanSource

Risk-Adjusted Performance

Weakest

Over the last 90 days ScanSource has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Synnex and ScanSource

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

The idea behind Synnex and ScanSource 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.