Correlation Between ScanSource and HealthStream
Can any of the company-specific risk be diversified away by investing in both ScanSource and HealthStream 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 HealthStream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and HealthStream, you can compare the effects of market volatilities on ScanSource and HealthStream 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 HealthStream. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and HealthStream.
Diversification Opportunities for ScanSource and HealthStream
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ScanSource and HealthStream is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and HealthStream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealthStream 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 HealthStream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealthStream has no effect on the direction of ScanSource i.e., ScanSource and HealthStream go up and down completely randomly.
Pair Corralation between ScanSource and HealthStream
Given the investment horizon of 90 days ScanSource is expected to generate 1.25 times more return on investment than HealthStream. However, ScanSource is 1.25 times more volatile than HealthStream. It trades about 0.04 of its potential returns per unit of risk. HealthStream is currently generating about 0.03 per unit of risk. If you would invest 2,996 in ScanSource on April 26, 2025 and sell it today you would earn a total of 1,109 from holding ScanSource or generate 37.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ScanSource vs. HealthStream
Performance |
| Timeline |
| ScanSource |
| HealthStream |
ScanSource and HealthStream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ScanSource and HealthStream
The main advantage of trading using opposite ScanSource and HealthStream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, HealthStream 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 HealthStream will offset losses from the drop in HealthStream's long position.| ScanSource vs. PC Connection | ScanSource vs. Insight Enterprises | ScanSource vs. Climb Global Solutions | ScanSource vs. Synnex |
| HealthStream vs. TruBridge | HealthStream vs. National Research Corp | HealthStream vs. Forian Inc | HealthStream vs. HealthEquity |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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