Correlation Between SSC Security and Blue Line

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

Diversification Opportunities for SSC Security and Blue Line

-0.5

Correlation Coefficient

SSC Security  Blue Line

Very good diversification

The 3 months correlation between SSC and Blue is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding SSC Security Services and Blue Line Protection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Line Protection 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 Blue Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Line Protection has no effect on the direction of SSC Security i.e., SSC Security and Blue Line go up and down completely randomly.

Pair Corralation between SSC Security and Blue Line

Assuming the 90 days horizon SSC Security Services is expected to generate 0.63 times more return on investment than Blue Line. However, SSC Security Services is 1.6 times less risky than Blue Line. It trades about 0.03 of its potential returns per unit of risk. Blue Line Protection is currently generating about 0.01 per unit of risk. If you would invest  184.00  in SSC Security Services on September 23, 2024 and sell it today you would lose (3.00) from holding SSC Security Services or give up 1.63% of portfolio value over 90 days.

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

SSC Security Services  vs.  Blue Line Protection

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Blue Line Protection

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Line Protection has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SSC Security and Blue Line

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

The idea behind SSC Security Services and Blue Line Protection 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.