Correlation Between SECURITAS and Powercell Sweden
Can any of the company-specific risk be diversified away by investing in both SECURITAS and Powercell Sweden 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 SECURITAS and Powercell Sweden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SECURITAS B and Powercell Sweden, you can compare the effects of market volatilities on SECURITAS and Powercell Sweden 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 SECURITAS with a short position of Powercell Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of SECURITAS and Powercell Sweden.
Diversification Opportunities for SECURITAS and Powercell Sweden
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between SECURITAS and Powercell is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding SECURITAS B and Powercell Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powercell Sweden and SECURITAS 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 SECURITAS B are associated (or correlated) with Powercell Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powercell Sweden has no effect on the direction of SECURITAS i.e., SECURITAS and Powercell Sweden go up and down completely randomly.
Pair Corralation between SECURITAS and Powercell Sweden
Assuming the 90 days trading horizon SECURITAS B is expected to generate 1.17 times more return on investment than Powercell Sweden. However, SECURITAS is 1.17 times more volatile than Powercell Sweden. It trades about 0.29 of its potential returns per unit of risk. Powercell Sweden is currently generating about -0.29 per unit of risk. If you would invest 905.00 in SECURITAS B on September 4, 2024 and sell it today you would earn a total of 277.00 from holding SECURITAS B or generate 30.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SECURITAS B vs. Powercell Sweden
Performance |
| Timeline |
| SECURITAS B |
| Powercell Sweden |
SECURITAS and Powercell Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SECURITAS and Powercell Sweden
The main advantage of trading using opposite SECURITAS and Powercell Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SECURITAS position performs unexpectedly, Powercell Sweden 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 Powercell Sweden will offset losses from the drop in Powercell Sweden's long position.| SECURITAS vs. AECOM TECHNOLOGY | SECURITAS vs. ADRIATIC METALS LS 013355 | SECURITAS vs. Sunny Optical Technology | SECURITAS vs. Ming Le Sports |
| Powercell Sweden vs. MAVEN WIRELESS SWEDEN | Powercell Sweden vs. INTERSHOP Communications Aktiengesellschaft | Powercell Sweden vs. Citic Telecom International | Powercell Sweden vs. SWISS WATER DECAFFCOFFEE |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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