Correlation Between Secom Co and Loomis AB
Can any of the company-specific risk be diversified away by investing in both Secom Co and Loomis AB 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 Secom Co and Loomis AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Secom Co Ltd and Loomis AB, you can compare the effects of market volatilities on Secom Co and Loomis AB 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 Secom Co with a short position of Loomis AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secom Co and Loomis AB.
Diversification Opportunities for Secom Co and Loomis AB
Pay attention - limited upside
The 3 months correlation between Secom and Loomis is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Secom Co Ltd and Loomis AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis AB and Secom Co 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 Secom Co Ltd are associated (or correlated) with Loomis AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loomis AB has no effect on the direction of Secom Co i.e., Secom Co and Loomis AB go up and down completely randomly.
Pair Corralation between Secom Co and Loomis AB
Assuming the 90 days horizon Secom Co is expected to generate 13.04 times less return on investment than Loomis AB. But when comparing it to its historical volatility, Secom Co Ltd is 1.72 times less risky than Loomis AB. It trades about 0.01 of its potential returns per unit of risk. Loomis AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,526 in Loomis AB on September 14, 2024 and sell it today you would earn a total of 672.00 from holding Loomis AB or generate 26.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 63.71% |
| Values | Daily Returns |
Secom Co Ltd vs. Loomis AB
Performance |
| Timeline |
| Secom Co |
| Loomis AB |
Secom Co and Loomis AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Secom Co and Loomis AB
The main advantage of trading using opposite Secom Co and Loomis AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Secom Co position performs unexpectedly, Loomis AB 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 Loomis AB will offset losses from the drop in Loomis AB's long position.| Secom Co vs. YourWay Cannabis Brands | Secom Co vs. China Finance Online | Secom Co vs. 1911 Gold Corp | Secom Co vs. Aquagold International |
| Loomis AB vs. Allegion PLC | Loomis AB vs. MSA Safety | Loomis AB vs. Resideo Technologies | Loomis AB vs. NL Industries |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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