Correlation Between Mechanics Construction and SSI Securities

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

By analyzing existing cross correlation between Mechanics Construction and and SSI Securities Corp, you can compare the effects of market volatilities on Mechanics Construction and SSI Securities 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 Mechanics Construction with a short position of SSI Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mechanics Construction and SSI Securities.

Diversification Opportunities for Mechanics Construction and SSI Securities

-0.08

Correlation Coefficient

Mechanics Construction  SSI Securities

Good diversification

The 3 months correlation between Mechanics and SSI is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Mechanics Construction and and SSI Securities Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSI Securities Corp and Mechanics Construction 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 Mechanics Construction and are associated (or correlated) with SSI Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSI Securities Corp has no effect on the direction of Mechanics Construction i.e., Mechanics Construction and SSI Securities go up and down completely randomly.

Pair Corralation between Mechanics Construction and SSI Securities

Assuming the 90 days trading horizon Mechanics Construction and is expected to generate 1.02 times more return on investment than SSI Securities. However, Mechanics Construction is 1.02 times more volatile than SSI Securities Corp. It trades about 0.05 of its potential returns per unit of risk. SSI Securities Corp is currently generating about 0.03 per unit of risk. If you would invest  617,416  in Mechanics Construction and on October 22, 2024 and sell it today you would earn a total of  252,584  from holding Mechanics Construction and or generate 40.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.73%
Values	Daily Returns

Mechanics Construction and  vs.  SSI Securities Corp

Mechanics Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mechanics Construction and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Mechanics Construction is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

SSI Securities Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSI Securities Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Mechanics Construction and SSI Securities

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

The idea behind Mechanics Construction and and SSI Securities 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.