Correlation Between SECURITAS and DAIMLER TRUCK
Can any of the company-specific risk be diversified away by investing in both SECURITAS and DAIMLER TRUCK 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 DAIMLER TRUCK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SECURITAS B and DAIMLER TRUCK SPADS12, you can compare the effects of market volatilities on SECURITAS and DAIMLER TRUCK 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 DAIMLER TRUCK. Check out your portfolio center. Please also check ongoing floating volatility patterns of SECURITAS and DAIMLER TRUCK.
Diversification Opportunities for SECURITAS and DAIMLER TRUCK
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SECURITAS and DAIMLER is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SECURITAS B and DAIMLER TRUCK SPADS12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAIMLER TRUCK SPADS12 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 DAIMLER TRUCK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAIMLER TRUCK SPADS12 has no effect on the direction of SECURITAS i.e., SECURITAS and DAIMLER TRUCK go up and down completely randomly.
Pair Corralation between SECURITAS and DAIMLER TRUCK
Assuming the 90 days trading horizon SECURITAS B is expected to generate 1.67 times more return on investment than DAIMLER TRUCK. However, SECURITAS is 1.67 times more volatile than DAIMLER TRUCK SPADS12. It trades about 0.22 of its potential returns per unit of risk. DAIMLER TRUCK SPADS12 is currently generating about -0.12 per unit of risk. If you would invest 951.00 in SECURITAS B on August 29, 2024 and sell it today you would earn a total of 217.00 from holding SECURITAS B or generate 22.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SECURITAS B vs. DAIMLER TRUCK SPADS12
Performance |
| Timeline |
| SECURITAS B |
| DAIMLER TRUCK SPADS12 |
SECURITAS and DAIMLER TRUCK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SECURITAS and DAIMLER TRUCK
The main advantage of trading using opposite SECURITAS and DAIMLER TRUCK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SECURITAS position performs unexpectedly, DAIMLER TRUCK 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 DAIMLER TRUCK will offset losses from the drop in DAIMLER TRUCK's long position.| SECURITAS vs. Apple Inc | SECURITAS vs. Apple Inc | SECURITAS vs. Superior Plus Corp | SECURITAS vs. SIVERS SEMICONDUCTORS AB |
| DAIMLER TRUCK vs. Anheuser Busch InBev SANV | DAIMLER TRUCK vs. AALBERTS IND | DAIMLER TRUCK vs. SECURITAS B | DAIMLER TRUCK vs. VERISK ANLYTCS A |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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