Correlation Between Security Bank and LT

Can any of the company-specific risk be diversified away by investing in both Security Bank and LT 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 LT 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 LT Group, you can compare the effects of market volatilities on Security Bank and LT 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 LT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Bank and LT.

Diversification Opportunities for Security Bank and LT

-0.8

Correlation Coefficient

Security Bank  LT

Pay attention - limited upside

The 3 months correlation between Security and LT is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank Corp and LT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LT Group 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 LT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LT Group has no effect on the direction of Security Bank i.e., Security Bank and LT go up and down completely randomly.

Pair Corralation between Security Bank and LT

Assuming the 90 days trading horizon Security Bank Corp is expected to under-perform the LT. In addition to that, Security Bank is 1.67 times more volatile than LT Group. It trades about -0.17 of its total potential returns per unit of risk. LT Group is currently generating about 0.22 per unit of volatility. If you would invest  1,050  in LT Group on December 27, 2024 and sell it today you would earn a total of  180.00  from holding LT Group or generate 17.14% return on investment over 90 days.

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

Security Bank Corp  vs.  LT Group

Security Bank Corp

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

LT Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LT Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, LT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Security Bank and LT

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

The idea behind Security Bank Corp and LT Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.