Correlation Between SCOTT TECHNOLOGY and Securitas
Can any of the company-specific risk be diversified away by investing in both SCOTT 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 SCOTT TECHNOLOGY and Securitas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOTT TECHNOLOGY and Securitas AB, you can compare the effects of market volatilities on SCOTT 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 SCOTT TECHNOLOGY with a short position of Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOTT TECHNOLOGY and Securitas.
Diversification Opportunities for SCOTT TECHNOLOGY and Securitas
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCOTT and Securitas is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding SCOTT TECHNOLOGY and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB and SCOTT 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 SCOTT 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 SCOTT TECHNOLOGY i.e., SCOTT TECHNOLOGY and Securitas go up and down completely randomly.
Pair Corralation between SCOTT TECHNOLOGY and Securitas
Assuming the 90 days trading horizon SCOTT TECHNOLOGY is expected to under-perform the Securitas. In addition to that, SCOTT TECHNOLOGY is 1.63 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 | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SCOTT TECHNOLOGY vs. Securitas AB
Performance |
| Timeline |
| SCOTT TECHNOLOGY |
| Securitas AB |
SCOTT TECHNOLOGY and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOTT TECHNOLOGY and Securitas
The main advantage of trading using opposite SCOTT TECHNOLOGY and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOTT 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.| SCOTT TECHNOLOGY vs. MPH Health Care | SCOTT TECHNOLOGY vs. Garofalo Health Care | SCOTT TECHNOLOGY vs. US Physical Therapy | SCOTT TECHNOLOGY vs. Siemens Healthineers AG |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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