Correlation Between SSC Security and Securitas
Can any of the company-specific risk be diversified away by investing in both SSC Security and Securitas 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 SSC Security and Securitas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSC Security Services and Securitas AB, you can compare the effects of market volatilities on SSC Security and Securitas 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 SSC Security with a short position of Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSC Security and Securitas.
Diversification Opportunities for SSC Security and Securitas
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SSC and Securitas is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding SSC Security Services and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB and SSC Security 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 SSC Security Services are associated (or correlated) with Securitas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Securitas AB has no effect on the direction of SSC Security i.e., SSC Security and Securitas go up and down completely randomly.
Pair Corralation between SSC Security and Securitas
Assuming the 90 days horizon SSC Security is expected to generate 1.96 times less return on investment than Securitas. In addition to that, SSC Security is 2.84 times more volatile than Securitas AB. It trades about 0.02 of its total potential returns per unit of risk. Securitas AB is currently generating about 0.1 per unit of volatility. If you would invest 8,167 in Securitas AB on August 31, 2024 and sell it today you would earn a total of 5,628 from holding Securitas AB or generate 68.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.94% |
| Values | Daily Returns |
SSC Security Services vs. Securitas AB
Performance |
| Timeline |
| SSC Security Services |
| Securitas AB |
SSC Security and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSC Security and Securitas
The main advantage of trading using opposite SSC Security and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSC Security position performs unexpectedly, Securitas 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 Securitas will offset losses from the drop in Securitas' long position.| SSC Security vs. YourWay Cannabis Brands | SSC Security vs. China Finance Online | SSC Security vs. 1911 Gold Corp | SSC Security vs. LeanLife Health |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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