Correlation Between Securitas and Sysco

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

By analyzing existing cross correlation between Securitas AB and Sysco, you can compare the effects of market volatilities on Securitas and Sysco 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 Sysco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Securitas and Sysco.

Diversification Opportunities for Securitas and Sysco

0.54

Correlation Coefficient

Securitas  Sysco

Very weak diversification

The 3 months correlation between Securitas and Sysco is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Securitas AB and Sysco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysco 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 AB are associated (or correlated) with Sysco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysco has no effect on the direction of Securitas i.e., Securitas and Sysco go up and down completely randomly.

Pair Corralation between Securitas and Sysco

If you would invest (100.00) in Securitas AB on October 24, 2024 and sell it today you would earn a total of  100.00  from holding Securitas AB or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

Securitas AB  vs.  Sysco

Securitas AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Securitas AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Securitas is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sysco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sysco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Sysco is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Securitas and Sysco

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

The idea behind Securitas AB and Sysco 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 Anywhere module to track or share privately all of your investments from the convenience of any device.