Correlation Between AECOM TECHNOLOGY and Securitas
Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY 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 AECOM TECHNOLOGY and Securitas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM TECHNOLOGY and Securitas AB, you can compare the effects of market volatilities on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY with a short position of Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and Securitas.
Diversification Opportunities for AECOM TECHNOLOGY and Securitas
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AECOM and Securitas is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and Securitas go up and down completely randomly.
Pair Corralation between AECOM TECHNOLOGY and Securitas
Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to under-perform the Securitas. But the stock apears to be less risky and, when comparing its historical volatility, AECOM TECHNOLOGY is 1.06 times less risky than Securitas. The stock trades about -0.14 of its potential returns per unit of risk. The Securitas AB is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,191 in Securitas AB on November 7, 2024 and sell it today you would earn a total of 34.00 from holding Securitas AB or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
AECOM TECHNOLOGY vs. Securitas AB
Performance |
| Timeline |
| AECOM TECHNOLOGY |
| Securitas AB |
AECOM TECHNOLOGY and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM TECHNOLOGY and Securitas
The main advantage of trading using opposite AECOM TECHNOLOGY and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY 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.| AECOM TECHNOLOGY vs. T Mobile | AECOM TECHNOLOGY vs. SOCKET MOBILE NEW | AECOM TECHNOLOGY vs. Infrastrutture Wireless Italiane | AECOM TECHNOLOGY vs. Cairo Communication SpA |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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