Correlation Between De Grey and Securitas
Can any of the company-specific risk be diversified away by investing in both De Grey 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 De Grey and Securitas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Grey Mining and Securitas AB, you can compare the effects of market volatilities on De Grey 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 De Grey with a short position of Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Securitas.
Diversification Opportunities for De Grey and Securitas
Very weak diversification
The 3 months correlation between DGD and Securitas is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB and De Grey 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 De Grey Mining 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 De Grey i.e., De Grey and Securitas go up and down completely randomly.
Pair Corralation between De Grey and Securitas
Assuming the 90 days trading horizon De Grey is expected to generate 1.11 times less return on investment than Securitas. In addition to that, De Grey is 1.36 times more volatile than Securitas AB. It trades about 0.08 of its total potential returns per unit of risk. Securitas AB is currently generating about 0.12 per unit of volatility. If you would invest 579.00 in Securitas AB on October 18, 2024 and sell it today you would earn a total of 577.00 from holding Securitas AB or generate 99.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Grey Mining vs. Securitas AB
Performance |
| Timeline |
| De Grey Mining |
| Securitas AB |
De Grey and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Securitas
The main advantage of trading using opposite De Grey and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey 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.| De Grey vs. AGF Management Limited | De Grey vs. Q2M Managementberatung AG | De Grey vs. TOREX SEMICONDUCTOR LTD | De Grey vs. Cleanaway Waste Management |
| Securitas vs. AIR PRODCHEMICALS | Securitas vs. De Grey Mining | Securitas vs. GRIFFIN MINING LTD | Securitas vs. GREENX METALS LTD |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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