Correlation Between AB Electrolux and Securitas
Can any of the company-specific risk be diversified away by investing in both AB Electrolux 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 AB Electrolux and Securitas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Electrolux and Securitas AB, you can compare the effects of market volatilities on AB Electrolux 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 AB Electrolux with a short position of Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Electrolux and Securitas.
Diversification Opportunities for AB Electrolux and Securitas
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ELUX-B and Securitas is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding AB Electrolux and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB and AB Electrolux 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 AB Electrolux 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 AB Electrolux i.e., AB Electrolux and Securitas go up and down completely randomly.
Pair Corralation between AB Electrolux and Securitas
Assuming the 90 days trading horizon AB Electrolux is expected to under-perform the Securitas. But the stock apears to be less risky and, when comparing its historical volatility, AB Electrolux is 1.21 times less risky than Securitas. The stock trades about -0.25 of its potential returns per unit of risk. The Securitas AB is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 12,545 in Securitas AB on August 30, 2024 and sell it today you would earn a total of 1,075 from holding Securitas AB or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Electrolux vs. Securitas AB
Performance |
| Timeline |
| AB Electrolux |
| Securitas AB |
AB Electrolux and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Electrolux and Securitas
The main advantage of trading using opposite AB Electrolux and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Electrolux 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.| AB Electrolux vs. AB SKF | AB Electrolux vs. Tele2 AB | AB Electrolux vs. Sandvik AB | AB Electrolux vs. Skanska AB |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |