Correlation Between Easy Software and Securitas
Can any of the company-specific risk be diversified away by investing in both Easy Software 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 Easy Software and Securitas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easy Software AG and Securitas AB, you can compare the effects of market volatilities on Easy Software 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 Easy Software with a short position of Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and Securitas.
Diversification Opportunities for Easy Software and Securitas
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Easy and Securitas is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB and Easy Software 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 Easy Software AG 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 Easy Software i.e., Easy Software and Securitas go up and down completely randomly.
Pair Corralation between Easy Software and Securitas
Assuming the 90 days trading horizon Easy Software is expected to generate 2.97 times less return on investment than Securitas. In addition to that, Easy Software is 2.56 times more volatile than Securitas AB. It trades about 0.01 of its total potential returns per unit of risk. Securitas AB is currently generating about 0.11 per unit of volatility. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Easy Software AG vs. Securitas AB
Performance |
| Timeline |
| Easy Software AG |
| Securitas AB |
Easy Software and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easy Software and Securitas
The main advantage of trading using opposite Easy Software and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software 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.| Easy Software vs. Suntory Beverage Food | Easy Software vs. Austevoll Seafood ASA | Easy Software vs. ANGANG STEEL H | Easy Software vs. Axfood 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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