Correlation Between ADHI KARYA and SECURITAS

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

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

Diversification Opportunities for ADHI KARYA and SECURITAS

-0.79

Correlation Coefficient

ADHI KARYA  SECURITAS

Pay attention - limited upside

The 3 months correlation between ADHI and SECURITAS is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding ADHI KARYA and SECURITAS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECURITAS B and ADHI KARYA 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 ADHI KARYA 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 B has no effect on the direction of ADHI KARYA i.e., ADHI KARYA and SECURITAS go up and down completely randomly.

Pair Corralation between ADHI KARYA and SECURITAS

Assuming the 90 days trading horizon ADHI KARYA is expected to under-perform the SECURITAS. In addition to that, ADHI KARYA is 1.17 times more volatile than SECURITAS B . It trades about -0.09 of its total potential returns per unit of risk. SECURITAS B is currently generating about 0.21 per unit of volatility. If you would invest  915.00  in SECURITAS B on October 7, 2024 and sell it today you would earn a total of  279.00  from holding SECURITAS B or generate 30.49% return on investment over 90 days.

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

ADHI KARYA  vs.  SECURITAS B

ADHI KARYA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ADHI KARYA 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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

SECURITAS B

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SECURITAS B are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SECURITAS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ADHI KARYA and SECURITAS

The main advantage of trading using opposite ADHI KARYA and SECURITAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADHI KARYA 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's long position.

The idea behind ADHI KARYA and SECURITAS B 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.