Correlation Between SSC Security and Bridger Aerospace

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

By analyzing existing cross correlation between SSC Security Services and Bridger Aerospace Group, you can compare the effects of market volatilities on SSC Security and Bridger Aerospace 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 SSC Security with a short position of Bridger Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSC Security and Bridger Aerospace.

Diversification Opportunities for SSC Security and Bridger Aerospace

-0.13

Correlation Coefficient

SSC Security  Bridger Aerospace

Good diversification

The 3 months correlation between SSC and Bridger is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding SSC Security Services and Bridger Aerospace Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridger Aerospace and SSC Security 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 SSC Security Services are associated (or correlated) with Bridger Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridger Aerospace has no effect on the direction of SSC Security i.e., SSC Security and Bridger Aerospace go up and down completely randomly.

Pair Corralation between SSC Security and Bridger Aerospace

Assuming the 90 days horizon SSC Security is expected to generate 100.08 times less return on investment than Bridger Aerospace. But when comparing it to its historical volatility, SSC Security Services is 18.79 times less risky than Bridger Aerospace. It trades about 0.01 of its potential returns per unit of risk. Bridger Aerospace Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Bridger Aerospace Group on October 12, 2024 and sell it today you would lose (1.00) from holding Bridger Aerospace Group or give up 6.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	83.23%
Values	Daily Returns

SSC Security Services  vs.  Bridger Aerospace Group

SSC Security Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSC Security Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SSC Security is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Bridger Aerospace

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bridger Aerospace Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Bridger Aerospace showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SSC Security and Bridger Aerospace

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

The idea behind SSC Security Services and Bridger Aerospace 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.