Correlation Between Security Bank and Suntrust Home
Can any of the company-specific risk be diversified away by investing in both Security Bank and Suntrust Home 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 Suntrust Home 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 Suntrust Home Developers, you can compare the effects of market volatilities on Security Bank and Suntrust Home 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 Suntrust Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Bank and Suntrust Home.
Diversification Opportunities for Security Bank and Suntrust Home
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Security and Suntrust is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank Corp and Suntrust Home Developers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntrust Home Developers 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 Suntrust Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntrust Home Developers has no effect on the direction of Security Bank i.e., Security Bank and Suntrust Home go up and down completely randomly.
Pair Corralation between Security Bank and Suntrust Home
Assuming the 90 days trading horizon Security Bank Corp is expected to under-perform the Suntrust Home. But the stock apears to be less risky and, when comparing its historical volatility, Security Bank Corp is 1.35 times less risky than Suntrust Home. The stock trades about -0.09 of its potential returns per unit of risk. The Suntrust Home Developers is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 89.00 in Suntrust Home Developers on September 5, 2024 and sell it today you would earn a total of 1.00 from holding Suntrust Home Developers or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 65.22% |
| Values | Daily Returns |
Security Bank Corp vs. Suntrust Home Developers
Performance |
| Timeline |
| Security Bank Corp |
| Suntrust Home Developers |
Security Bank and Suntrust Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Bank and Suntrust Home
The main advantage of trading using opposite Security Bank and Suntrust Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Bank position performs unexpectedly, Suntrust Home 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 Suntrust Home will offset losses from the drop in Suntrust Home's long position.| Security Bank vs. Suntrust Home Developers | Security Bank vs. Transpacific Broadband Group | Security Bank vs. Lepanto Consolidated Mining | Security Bank vs. Philex Mining Corp |
| Suntrust Home vs. Metropolitan Bank Trust | Suntrust Home vs. Semirara Mining Corp | Suntrust Home vs. Allhome Corp | Suntrust Home vs. Converge Information Communications |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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