Correlation Between AAC Clyde and Securitas
Can any of the company-specific risk be diversified away by investing in both AAC Clyde 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 AAC Clyde and Securitas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC Clyde Space and Securitas AB, you can compare the effects of market volatilities on AAC Clyde 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 AAC Clyde with a short position of Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC Clyde and Securitas.
Diversification Opportunities for AAC Clyde and Securitas
Modest diversification
The 3 months correlation between AAC and Securitas is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AAC Clyde Space and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB and AAC Clyde 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 AAC Clyde Space 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 AAC Clyde i.e., AAC Clyde and Securitas go up and down completely randomly.
Pair Corralation between AAC Clyde and Securitas
Assuming the 90 days trading horizon AAC Clyde Space is expected to generate 3.07 times more return on investment than Securitas. However, AAC Clyde is 3.07 times more volatile than Securitas AB. It trades about 0.18 of its potential returns per unit of risk. Securitas AB is currently generating about 0.05 per unit of risk. If you would invest 4,635 in AAC Clyde Space on December 30, 2024 and sell it today you would earn a total of 2,545 from holding AAC Clyde Space or generate 54.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AAC Clyde Space vs. Securitas AB
Performance |
Timeline |
AAC Clyde Space |
Securitas AB |
AAC Clyde and Securitas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AAC Clyde and Securitas
The main advantage of trading using opposite AAC Clyde and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC Clyde 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.AAC Clyde vs. GomSpace Group AB | AAC Clyde vs. Eolus Vind AB | AAC Clyde vs. Fingerprint Cards AB | AAC Clyde vs. SaltX Technology Holding |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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