Correlation Between Real Heart and Securitas
Can any of the company-specific risk be diversified away by investing in both Real Heart 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 Real Heart and Securitas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Real Heart and Securitas AB, you can compare the effects of market volatilities on Real Heart 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 Real Heart with a short position of Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Heart and Securitas.
Diversification Opportunities for Real Heart and Securitas
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Real and Securitas is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Real Heart and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB and Real Heart 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 Real Heart 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 Real Heart i.e., Real Heart and Securitas go up and down completely randomly.
Pair Corralation between Real Heart and Securitas
Assuming the 90 days trading horizon Real Heart is expected to under-perform the Securitas. In addition to that, Real Heart is 1.45 times more volatile than Securitas AB. It trades about -0.06 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 12,757 in Securitas AB on August 29, 2024 and sell it today you would earn a total of 748.00 from holding Securitas AB or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Real Heart vs. Securitas AB
Performance |
| Timeline |
| Real Heart |
| Securitas AB |
Real Heart and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Heart and Securitas
The main advantage of trading using opposite Real Heart and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Heart 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.| Real Heart vs. KABE Group AB | Real Heart vs. IAR Systems Group | Real Heart vs. Mekonomen AB | Real Heart vs. Clinical Laserthermia Systems |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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