Correlation Between STILLFRONT GRP and SECURITAS

Can any of the company-specific risk be diversified away by investing in both STILLFRONT GRP 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 STILLFRONT GRP and SECURITAS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between STILLFRONT GRP AB and SECURITAS B , you can compare the effects of market volatilities on STILLFRONT GRP 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 STILLFRONT GRP with a short position of SECURITAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of STILLFRONT GRP and SECURITAS.

Diversification Opportunities for STILLFRONT GRP and SECURITAS

0.39

Correlation Coefficient

STILLFRONT GRP  SECURITAS

Weak diversification

The 3 months correlation between STILLFRONT and SECURITAS is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding STILLFRONT GRP AB and SECURITAS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECURITAS B and STILLFRONT GRP 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 STILLFRONT GRP AB 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 B has no effect on the direction of STILLFRONT GRP i.e., STILLFRONT GRP and SECURITAS go up and down completely randomly.

Pair Corralation between STILLFRONT GRP and SECURITAS

Assuming the 90 days trading horizon STILLFRONT GRP AB is expected to under-perform the SECURITAS. In addition to that, STILLFRONT GRP is 4.98 times more volatile than SECURITAS B . It trades about -0.17 of its total potential returns per unit of risk. SECURITAS B is currently generating about -0.05 per unit of volatility. If you would invest  1,190  in SECURITAS B on October 22, 2024 and sell it today you would lose (7.00) from holding SECURITAS B or give up 0.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

STILLFRONT GRP AB  vs.  SECURITAS B

STILLFRONT GRP AB

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in STILLFRONT GRP AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, STILLFRONT GRP reported solid returns over the last few months and may actually be approaching a breakup point.

SECURITAS B

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days SECURITAS B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak basic indicators, SECURITAS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with STILLFRONT GRP and SECURITAS

The main advantage of trading using opposite STILLFRONT GRP and SECURITAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STILLFRONT GRP 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's long position.

The idea behind STILLFRONT GRP AB and SECURITAS B pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.