Correlation Between LeanLife Health and SSC Security

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

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

Diversification Opportunities for LeanLife Health and SSC Security

0.0

Correlation Coefficient

LeanLife Health  SSC Security

Pay attention - limited upside

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

Pair Corralation between LeanLife Health and SSC Security

If you would invest  0.50  in LeanLife Health on September 26, 2024 and sell it today you would earn a total of  0.00  from holding LeanLife Health or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

LeanLife Health  vs.  SSC Security Services

LeanLife Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LeanLife Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, LeanLife Health is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

SSC Security Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSC Security Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SSC Security is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with LeanLife Health and SSC Security

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

The idea behind LeanLife Health and SSC Security Services 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.