Correlation Between Strategic Education and Securitas
Can any of the company-specific risk be diversified away by investing in both Strategic Education 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 Strategic Education and Securitas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Education and Securitas AB, you can compare the effects of market volatilities on Strategic Education 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 Strategic Education with a short position of Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Education and Securitas.
Diversification Opportunities for Strategic Education and Securitas
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Strategic and Securitas is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Education and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB and Strategic Education 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 Strategic Education 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 Strategic Education i.e., Strategic Education and Securitas go up and down completely randomly.
Pair Corralation between Strategic Education and Securitas
Assuming the 90 days horizon Strategic Education is expected to generate 0.88 times more return on investment than Securitas. However, Strategic Education is 1.14 times less risky than Securitas. It trades about 0.25 of its potential returns per unit of risk. Securitas AB is currently generating about 0.11 per unit of risk. If you would invest 8,900 in Strategic Education on November 7, 2024 and sell it today you would earn a total of 550.00 from holding Strategic Education or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Strategic Education vs. Securitas AB
Performance |
| Timeline |
| Strategic Education |
| Securitas AB |
Strategic Education and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Education and Securitas
The main advantage of trading using opposite Strategic Education and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Education 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.| Strategic Education vs. ARDAGH METAL PACDL 0001 | Strategic Education vs. East Africa Metals | Strategic Education vs. Scottish Mortgage Investment | Strategic Education vs. Harmony Gold Mining |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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