Correlation Between DevEx Resources and Securitas
Can any of the company-specific risk be diversified away by investing in both DevEx Resources and Securitas 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 DevEx Resources and Securitas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DevEx Resources Limited and Securitas AB, you can compare the effects of market volatilities on DevEx Resources and Securitas 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 DevEx Resources with a short position of Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of DevEx Resources and Securitas.
Diversification Opportunities for DevEx Resources and Securitas
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DevEx and Securitas is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding DevEx Resources Limited and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB and DevEx Resources 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 DevEx Resources Limited are associated (or correlated) with Securitas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Securitas AB has no effect on the direction of DevEx Resources i.e., DevEx Resources and Securitas go up and down completely randomly.
Pair Corralation between DevEx Resources and Securitas
Assuming the 90 days horizon DevEx Resources Limited is expected to under-perform the Securitas. In addition to that, DevEx Resources is 7.2 times more volatile than Securitas AB. It trades about -0.2 of its total potential returns per unit of risk. Securitas AB is currently generating about 0.07 per unit of volatility. If you would invest 1,184 in Securitas AB on September 29, 2024 and sell it today you would earn a total of 18.00 from holding Securitas AB or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DevEx Resources Limited vs. Securitas AB
Performance |
| Timeline |
| DevEx Resources |
| Securitas AB |
DevEx Resources and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DevEx Resources and Securitas
The main advantage of trading using opposite DevEx Resources and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DevEx Resources position performs unexpectedly, Securitas 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 Securitas will offset losses from the drop in Securitas' long position.| DevEx Resources vs. Rio Tinto Group | DevEx Resources vs. Anglo American plc | DevEx Resources vs. Liontown Resources Limited | DevEx Resources vs. NEXA RESOURCES SA |
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 CEOs Directory module to screen CEOs from public companies around the world.
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