Correlation Between SSC Security and Zedcor

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

Diversification Opportunities for SSC Security and Zedcor

0.57

Correlation Coefficient

SSC Security  Zedcor

Very weak diversification

The 3 months correlation between SSC and Zedcor is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding SSC Security Services and Zedcor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zedcor Inc 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 Zedcor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zedcor Inc has no effect on the direction of SSC Security i.e., SSC Security and Zedcor go up and down completely randomly.

Pair Corralation between SSC Security and Zedcor

Assuming the 90 days horizon SSC Security is expected to generate 4.37 times less return on investment than Zedcor. In addition to that, SSC Security is 1.78 times more volatile than Zedcor Inc. It trades about 0.03 of its total potential returns per unit of risk. Zedcor Inc is currently generating about 0.21 per unit of volatility. If you would invest  91.00  in Zedcor Inc on September 23, 2024 and sell it today you would earn a total of  134.00  from holding Zedcor Inc or generate 147.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.22%
Values	Daily Returns

SSC Security Services  vs.  Zedcor Inc

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.

Zedcor Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zedcor Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Zedcor reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SSC Security and Zedcor

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

The idea behind SSC Security Services and Zedcor Inc 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.