Correlation Between Security Bank and AgriNurture
Can any of the company-specific risk be diversified away by investing in both Security Bank and AgriNurture 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 Security Bank and AgriNurture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Security Bank Corp and AgriNurture, you can compare the effects of market volatilities on Security Bank and AgriNurture 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 Security Bank with a short position of AgriNurture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Bank and AgriNurture.
Diversification Opportunities for Security Bank and AgriNurture
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Security and AgriNurture is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank Corp and AgriNurture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriNurture and Security Bank 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 Security Bank Corp are associated (or correlated) with AgriNurture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriNurture has no effect on the direction of Security Bank i.e., Security Bank and AgriNurture go up and down completely randomly.
Pair Corralation between Security Bank and AgriNurture
Assuming the 90 days trading horizon Security Bank Corp is expected to under-perform the AgriNurture. But the stock apears to be less risky and, when comparing its historical volatility, Security Bank Corp is 1.03 times less risky than AgriNurture. The stock trades about -0.06 of its potential returns per unit of risk. The AgriNurture is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 54.00 in AgriNurture on August 28, 2024 and sell it today you would earn a total of 0.00 from holding AgriNurture or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Security Bank Corp vs. AgriNurture
Performance |
| Timeline |
| Security Bank Corp |
| AgriNurture |
Security Bank and AgriNurture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Bank and AgriNurture
The main advantage of trading using opposite Security Bank and AgriNurture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Bank position performs unexpectedly, AgriNurture 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 AgriNurture will offset losses from the drop in AgriNurture's long position.The idea behind Security Bank Corp and AgriNurture pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AgriNurture vs. Balai Ni Fruitas | AgriNurture vs. Allhome Corp | AgriNurture vs. Jollibee Foods Corp | AgriNurture vs. LFM Properties Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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