Correlation Between Security Bank and Concepcion Industrial

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

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

Diversification Opportunities for Security Bank and Concepcion Industrial

0.63

Correlation Coefficient

Security Bank  Concepcion Industrial

Poor diversification

The 3 months correlation between Security and Concepcion is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank Corp and Concepcion Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concepcion Industrial and Security Bank 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 Security Bank Corp are associated (or correlated) with Concepcion Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concepcion Industrial has no effect on the direction of Security Bank i.e., Security Bank and Concepcion Industrial go up and down completely randomly.

Pair Corralation between Security Bank and Concepcion Industrial

Assuming the 90 days trading horizon Security Bank Corp is expected to under-perform the Concepcion Industrial. In addition to that, Security Bank is 1.61 times more volatile than Concepcion Industrial Corp. It trades about -0.15 of its total potential returns per unit of risk. Concepcion Industrial Corp is currently generating about -0.01 per unit of volatility. If you would invest  1,376  in Concepcion Industrial Corp on October 25, 2024 and sell it today you would lose (20.00) from holding Concepcion Industrial Corp or give up 1.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.83%
Values	Daily Returns

Security Bank Corp  vs.  Concepcion Industrial Corp

Security Bank Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Security Bank Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Concepcion Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concepcion Industrial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Concepcion Industrial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Security Bank and Concepcion Industrial

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

The idea behind Security Bank Corp and Concepcion Industrial 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.