Correlation Between Ameriguard Security and Supercom

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

By analyzing existing cross correlation between Ameriguard Security Services and Supercom, you can compare the effects of market volatilities on Ameriguard Security and Supercom 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 Ameriguard Security with a short position of Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriguard Security and Supercom.

Diversification Opportunities for Ameriguard Security and Supercom

0.38

Correlation Coefficient

Ameriguard Security  Supercom

Weak diversification

The 3 months correlation between Ameriguard and Supercom is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ameriguard Security Services and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom and Ameriguard Security 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 Ameriguard Security Services are associated (or correlated) with Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of Ameriguard Security i.e., Ameriguard Security and Supercom go up and down completely randomly.

Pair Corralation between Ameriguard Security and Supercom

Given the investment horizon of 90 days Ameriguard Security Services is expected to generate 3.44 times more return on investment than Supercom. However, Ameriguard Security is 3.44 times more volatile than Supercom. It trades about 0.05 of its potential returns per unit of risk. Supercom is currently generating about -0.01 per unit of risk. If you would invest  23.00  in Ameriguard Security Services on September 24, 2024 and sell it today you would lose (11.00) from holding Ameriguard Security Services or give up 47.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ameriguard Security Services  vs.  Supercom

Ameriguard Security

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriguard Security Services are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Ameriguard Security unveiled solid returns over the last few months and may actually be approaching a breakup point.

Supercom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Supercom has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Supercom is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ameriguard Security and Supercom

The main advantage of trading using opposite Ameriguard Security and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriguard Security position performs unexpectedly, Supercom 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 Supercom will offset losses from the drop in Supercom's long position.

The idea behind Ameriguard Security Services and Supercom 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.