Correlation Between Security Bank and Top Frontier
Can any of the company-specific risk be diversified away by investing in both Security Bank and Top Frontier 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 Top Frontier 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 Top Frontier Investment, you can compare the effects of market volatilities on Security Bank and Top Frontier 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 Top Frontier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Bank and Top Frontier.
Diversification Opportunities for Security Bank and Top Frontier
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Security and Top is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank Corp and Top Frontier Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Frontier Investment 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 Top Frontier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Frontier Investment has no effect on the direction of Security Bank i.e., Security Bank and Top Frontier go up and down completely randomly.
Pair Corralation between Security Bank and Top Frontier
Assuming the 90 days trading horizon Security Bank Corp is expected to generate 0.36 times more return on investment than Top Frontier. However, Security Bank Corp is 2.75 times less risky than Top Frontier. It trades about 0.02 of its potential returns per unit of risk. Top Frontier Investment is currently generating about 0.0 per unit of risk. If you would invest 8,162 in Security Bank Corp on September 3, 2024 and sell it today you would earn a total of 518.00 from holding Security Bank Corp or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.21% |
| Values | Daily Returns |
Security Bank Corp vs. Top Frontier Investment
Performance |
| Timeline |
| Security Bank Corp |
| Top Frontier Investment |
Security Bank and Top Frontier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Bank and Top Frontier
The main advantage of trading using opposite Security Bank and Top Frontier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Bank position performs unexpectedly, Top Frontier 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 Top Frontier will offset losses from the drop in Top Frontier's long position.| Security Bank vs. Converge Information Communications | Security Bank vs. Asia United Bank | Security Bank vs. Suntrust Home Developers | Security Bank vs. Lepanto Consolidated Mining |
| Top Frontier vs. Security Bank Corp | Top Frontier vs. COL Financial Group | Top Frontier vs. Semirara Mining Corp | Top Frontier vs. SM Investments 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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