Correlation Between TOTAL GABON and SECURITAS
Can any of the company-specific risk be diversified away by investing in both TOTAL GABON 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 TOTAL GABON and SECURITAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOTAL GABON and SECURITAS B , you can compare the effects of market volatilities on TOTAL GABON 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 TOTAL GABON with a short position of SECURITAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTAL GABON and SECURITAS.
Diversification Opportunities for TOTAL GABON and SECURITAS
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TOTAL and SECURITAS is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL GABON and SECURITAS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECURITAS B and TOTAL GABON 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 TOTAL GABON 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 B has no effect on the direction of TOTAL GABON i.e., TOTAL GABON and SECURITAS go up and down completely randomly.
Pair Corralation between TOTAL GABON and SECURITAS
Assuming the 90 days trading horizon TOTAL GABON is expected to generate 2.81 times less return on investment than SECURITAS. But when comparing it to its historical volatility, TOTAL GABON is 1.44 times less risky than SECURITAS. It trades about 0.08 of its potential returns per unit of risk. SECURITAS B is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 630.00 in SECURITAS B on September 3, 2024 and sell it today you would earn a total of 552.00 from holding SECURITAS B or generate 87.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOTAL GABON vs. SECURITAS B
Performance |
| Timeline |
| TOTAL GABON |
| SECURITAS B |
TOTAL GABON and SECURITAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOTAL GABON and SECURITAS
The main advantage of trading using opposite TOTAL GABON and SECURITAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOTAL GABON 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's long position.| TOTAL GABON vs. TOTAL BANGUN PERSAD | TOTAL GABON vs. TOTAL BANGUN PERSAD | TOTAL GABON vs. TOTAL ENERGY SERVS | TOTAL GABON vs. Anheuser Busch InBev SANV |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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