Correlation Between Avnet and ScanSource
Can any of the company-specific risk be diversified away by investing in both Avnet 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 Avnet and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avnet Inc and ScanSource, you can compare the effects of market volatilities on Avnet 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 Avnet with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avnet and ScanSource.
Diversification Opportunities for Avnet and ScanSource
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avnet and ScanSource is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Avnet Inc and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and Avnet 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 Avnet Inc 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 Avnet i.e., Avnet and ScanSource go up and down completely randomly.
Pair Corralation between Avnet and ScanSource
Considering the 90-day investment horizon Avnet Inc is expected to generate 1.05 times more return on investment than ScanSource. However, Avnet is 1.05 times more volatile than ScanSource. It trades about 0.09 of its potential returns per unit of risk. ScanSource is currently generating about -0.05 per unit of risk. If you would invest 5,208 in Avnet Inc on April 26, 2025 and sell it today you would earn a total of 126.00 from holding Avnet Inc or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avnet Inc vs. ScanSource
Performance |
| Timeline |
| Avnet Inc |
| ScanSource |
Avnet and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avnet and ScanSource
The main advantage of trading using opposite Avnet and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avnet 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.| Avnet vs. Arrow Electronics | Avnet vs. Insight Enterprises | Avnet vs. Synnex | Avnet vs. Climb Global Solutions |
| ScanSource vs. PC Connection | ScanSource vs. Insight Enterprises | ScanSource vs. Climb Global Solutions | ScanSource vs. Synnex |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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