Correlation Between SECURITAS and HYBRIGENICS

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

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

Diversification Opportunities for SECURITAS and HYBRIGENICS

-0.6

Correlation Coefficient

SECURITAS  HYBRIGENICS

Excellent diversification

The 3 months correlation between SECURITAS and HYBRIGENICS is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding SECURITAS B and HYBRIGENICS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYBRIGENICS A and SECURITAS 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 SECURITAS B are associated (or correlated) with HYBRIGENICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYBRIGENICS A has no effect on the direction of SECURITAS i.e., SECURITAS and HYBRIGENICS go up and down completely randomly.

Pair Corralation between SECURITAS and HYBRIGENICS

Assuming the 90 days trading horizon SECURITAS B is expected to generate 0.26 times more return on investment than HYBRIGENICS. However, SECURITAS B is 3.79 times less risky than HYBRIGENICS. It trades about 0.13 of its potential returns per unit of risk. HYBRIGENICS A is currently generating about 0.0 per unit of risk. If you would invest  580.00  in SECURITAS B on October 7, 2024 and sell it today you would earn a total of  614.00  from holding SECURITAS B or generate 105.86% return on investment over 90 days.

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

SECURITAS B   vs.  HYBRIGENICS A

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.

HYBRIGENICS A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HYBRIGENICS A 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 fundamental drivers remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with SECURITAS and HYBRIGENICS

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

The idea behind SECURITAS B and HYBRIGENICS A 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.