Correlation Between Exsitec Holding and SECITS Holding

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

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

Diversification Opportunities for Exsitec Holding and SECITS Holding

0.51

Correlation Coefficient

Exsitec Holding  SECITS Holding

Very weak diversification

The 3 months correlation between Exsitec and SECITS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Exsitec Holding AB and SECITS Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECITS Holding AB and Exsitec Holding 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 Exsitec Holding AB are associated (or correlated) with SECITS Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECITS Holding AB has no effect on the direction of Exsitec Holding i.e., Exsitec Holding and SECITS Holding go up and down completely randomly.

Pair Corralation between Exsitec Holding and SECITS Holding

Assuming the 90 days trading horizon Exsitec Holding AB is expected to under-perform the SECITS Holding. But the stock apears to be less risky and, when comparing its historical volatility, Exsitec Holding AB is 4.43 times less risky than SECITS Holding. The stock trades about -0.16 of its potential returns per unit of risk. The SECITS Holding AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3.00  in SECITS Holding AB on December 30, 2024 and sell it today you would lose (0.30) from holding SECITS Holding AB or give up 10.0% of portfolio value over 90 days.

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

Exsitec Holding AB  vs.  SECITS Holding AB

Exsitec Holding AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exsitec Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

SECITS Holding AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SECITS Holding AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SECITS Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exsitec Holding and SECITS Holding

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

The idea behind Exsitec Holding AB and SECITS Holding 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.

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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 Stocks Directory module to find actively traded stocks across global markets.