Correlation Between DATAGROUP and Securitas
Can any of the company-specific risk be diversified away by investing in both DATAGROUP 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 DATAGROUP and Securitas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DATAGROUP SE and Securitas AB, you can compare the effects of market volatilities on DATAGROUP 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 DATAGROUP with a short position of Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATAGROUP and Securitas.
Diversification Opportunities for DATAGROUP and Securitas
Poor diversification
The 3 months correlation between DATAGROUP and Securitas is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding DATAGROUP SE and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB and DATAGROUP 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 DATAGROUP SE 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 DATAGROUP i.e., DATAGROUP and Securitas go up and down completely randomly.
Pair Corralation between DATAGROUP and Securitas
Assuming the 90 days trading horizon DATAGROUP SE is expected to under-perform the Securitas. But the stock apears to be less risky and, when comparing its historical volatility, DATAGROUP SE is 1.33 times less risky than Securitas. The stock trades about -0.04 of its potential returns per unit of risk. The Securitas AB is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 348.00 in Securitas AB on October 17, 2024 and sell it today you would earn a total of 823.00 from holding Securitas AB or generate 236.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DATAGROUP SE vs. Securitas AB
Performance |
| Timeline |
| DATAGROUP SE |
| Securitas AB |
DATAGROUP and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DATAGROUP and Securitas
The main advantage of trading using opposite DATAGROUP and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATAGROUP 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.| DATAGROUP vs. SEKISUI CHEMICAL | DATAGROUP vs. PNC Financial Services | DATAGROUP vs. United Insurance Holdings | DATAGROUP vs. CVB Financial Corp |
| Securitas vs. DATANG INTL POW | Securitas vs. NTT DATA | Securitas vs. Adtalem Global Education | Securitas vs. betterU Education Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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