Correlation Between House Of and Security Bank

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

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

Diversification Opportunities for House Of and Security Bank

0.21

Correlation Coefficient

House Of  Security Bank

Modest diversification

The 3 months correlation between House and Security is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding House of Investments and Security Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Bank Corp and House Of 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 House of Investments are associated (or correlated) with Security Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Bank Corp has no effect on the direction of House Of i.e., House Of and Security Bank go up and down completely randomly.

Pair Corralation between House Of and Security Bank

Assuming the 90 days trading horizon House of Investments is expected to generate 1.72 times more return on investment than Security Bank. However, House Of is 1.72 times more volatile than Security Bank Corp. It trades about 0.02 of its potential returns per unit of risk. Security Bank Corp is currently generating about -0.15 per unit of risk. If you would invest  342.00  in House of Investments on December 30, 2024 and sell it today you would earn a total of  3.00  from holding House of Investments or generate 0.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	50.0%
Values	Daily Returns

House of Investments  vs.  Security Bank Corp

House of Investments

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in House of Investments are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, House Of is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Security Bank Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Security Bank Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady 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.

Pair Trading with House Of and Security Bank

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

The idea behind House of Investments and Security Bank Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.