Correlation Between Crazy Woman and Security Federal

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

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

Diversification Opportunities for Crazy Woman and Security Federal

0.0

Correlation Coefficient

Crazy Woman  Security Federal

Pay attention - limited upside

The 3 months correlation between Crazy and Security is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Crazy Woman Creek and Security Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Federal and Crazy Woman 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 Crazy Woman Creek are associated (or correlated) with Security Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Federal has no effect on the direction of Crazy Woman i.e., Crazy Woman and Security Federal go up and down completely randomly.

Pair Corralation between Crazy Woman and Security Federal

If you would invest  2,701  in Security Federal on December 20, 2024 and sell it today you would earn a total of  274.00  from holding Security Federal or generate 10.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Crazy Woman Creek  vs.  Security Federal

Crazy Woman Creek

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crazy Woman Creek has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Crazy Woman is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Security Federal

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Security Federal are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Security Federal disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crazy Woman and Security Federal

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

The idea behind Crazy Woman Creek and Security Federal 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.