Correlation Between SECURITAS and Apple
Can any of the company-specific risk be diversified away by investing in both SECURITAS and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SECURITAS B and Apple Inc, you can compare the effects of market volatilities on SECURITAS and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of SECURITAS and Apple.
Diversification Opportunities for SECURITAS and Apple
Poor diversification
The 3 months correlation between SECURITAS and Apple is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding SECURITAS B and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of SECURITAS i.e., SECURITAS and Apple go up and down completely randomly.
Pair Corralation between SECURITAS and Apple
Assuming the 90 days trading horizon SECURITAS B is expected to generate 1.73 times more return on investment than Apple. However, SECURITAS is 1.73 times more volatile than Apple Inc. It trades about 0.11 of its potential returns per unit of risk. Apple Inc is currently generating about 0.08 per unit of risk. If you would invest 313.00 in SECURITAS B on September 1, 2024 and sell it today you would earn a total of 869.00 from holding SECURITAS B or generate 277.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
SECURITAS B vs. Apple Inc
Performance |
| Timeline |
| SECURITAS B |
| Apple Inc |
SECURITAS and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SECURITAS and Apple
The main advantage of trading using opposite SECURITAS and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SECURITAS position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| SECURITAS vs. ADRIATIC METALS LS 013355 | SECURITAS vs. Check Point Software | SECURITAS vs. Micron Technology | SECURITAS vs. Jacquet Metal Service |
| Apple vs. Sumitomo Rubber Industries | Apple vs. Rayonier Advanced Materials | Apple vs. EAGLE MATERIALS | Apple vs. NEWELL RUBBERMAID |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |