Correlation Between SSC Technologies and Alarm Holdings
Can any of the company-specific risk be diversified away by investing in both SSC Technologies and Alarm Holdings 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 Technologies and Alarm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSC Technologies Holdings and Alarm Holdings, you can compare the effects of market volatilities on SSC Technologies and Alarm Holdings 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 Technologies with a short position of Alarm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSC Technologies and Alarm Holdings.
Diversification Opportunities for SSC Technologies and Alarm Holdings
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SSC and Alarm is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding SSC Technologies Holdings and Alarm Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alarm Holdings and SSC Technologies 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 Technologies Holdings are associated (or correlated) with Alarm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alarm Holdings has no effect on the direction of SSC Technologies i.e., SSC Technologies and Alarm Holdings go up and down completely randomly.
Pair Corralation between SSC Technologies and Alarm Holdings
Given the investment horizon of 90 days SSC Technologies Holdings is expected to generate 0.93 times more return on investment than Alarm Holdings. However, SSC Technologies Holdings is 1.08 times less risky than Alarm Holdings. It trades about 0.37 of its potential returns per unit of risk. Alarm Holdings is currently generating about 0.14 per unit of risk. If you would invest 7,570 in SSC Technologies Holdings on November 7, 2024 and sell it today you would earn a total of 610.00 from holding SSC Technologies Holdings or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
SSC Technologies Holdings vs. Alarm Holdings
Performance |
| Timeline |
| SSC Technologies Holdings |
| Alarm Holdings |
SSC Technologies and Alarm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSC Technologies and Alarm Holdings
The main advantage of trading using opposite SSC Technologies and Alarm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSC Technologies position performs unexpectedly, Alarm Holdings 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 Alarm Holdings will offset losses from the drop in Alarm Holdings' long position.| SSC Technologies vs. Aspen Technology | SSC Technologies vs. Bentley Systems | SSC Technologies vs. Tyler Technologies | SSC Technologies vs. Blackbaud |
| Alarm Holdings vs. Paycor HCM | Alarm Holdings vs. Appfolio | Alarm Holdings vs. Agilysys | Alarm Holdings vs. Alkami Technology |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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