Correlation Between BOS Better and Securitas

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

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

Diversification Opportunities for BOS Better and Securitas

0.9

Correlation Coefficient

BOS Better  Securitas

Almost no diversification

The 3 months correlation between BOS and Securitas is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB and BOS Better 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 BOS Better Online 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 BOS Better i.e., BOS Better and Securitas go up and down completely randomly.

Pair Corralation between BOS Better and Securitas

If you would invest  1,285  in Securitas AB on September 26, 2024 and sell it today you would earn a total of  0.00  from holding Securitas AB or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	4.76%
Values	Daily Returns

BOS Better Online  vs.  Securitas AB

BOS Better Online

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BOS Better Online are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, BOS Better may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Securitas AB

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Securitas AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly abnormal fundamental drivers, Securitas reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BOS Better and Securitas

The main advantage of trading using opposite BOS Better and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOS Better 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.

The idea behind BOS Better Online and Securitas AB 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.