Correlation Between Converge Information and Security Bank
Can any of the company-specific risk be diversified away by investing in both Converge Information and Security Bank 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 Converge Information and Security Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Converge Information Communications and Security Bank Corp, you can compare the effects of market volatilities on Converge Information and Security Bank 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 Converge Information with a short position of Security Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Information and Security Bank.
Diversification Opportunities for Converge Information and Security Bank
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Converge and Security is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Converge Information Communica and Security Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Bank Corp and Converge Information 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 Converge Information Communications are associated (or correlated) with Security Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Bank Corp has no effect on the direction of Converge Information i.e., Converge Information and Security Bank go up and down completely randomly.
Pair Corralation between Converge Information and Security Bank
Assuming the 90 days trading horizon Converge Information Communications is expected to generate 1.15 times more return on investment than Security Bank. However, Converge Information is 1.15 times more volatile than Security Bank Corp. It trades about -0.1 of its potential returns per unit of risk. Security Bank Corp is currently generating about -0.15 per unit of risk. If you would invest 1,674 in Converge Information Communications on August 25, 2024 and sell it today you would lose (94.00) from holding Converge Information Communications or give up 5.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Converge Information Communica vs. Security Bank Corp
Performance |
| Timeline |
| Converge Information |
| Security Bank Corp |
Converge Information and Security Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Converge Information and Security Bank
The main advantage of trading using opposite Converge Information and Security Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Information position performs unexpectedly, Security Bank 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 Security Bank will offset losses from the drop in Security Bank's long position.| Converge Information vs. Atlas Consolidated Mining | Converge Information vs. Suntrust Home Developers | Converge Information vs. Apex Mining Co | Converge Information vs. Crown Asia Chemicals |
| Security Bank vs. COL Financial Group | Security Bank vs. Philippine Business Bank | Security Bank vs. Metropolitan Bank Trust | Security Bank vs. East West Banking |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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