Correlation Between Security National and Greystone Housing

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

By analyzing existing cross correlation between Security National Financial and Greystone Housing Impact, you can compare the effects of market volatilities on Security National and Greystone Housing 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 National with a short position of Greystone Housing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security National and Greystone Housing.

Diversification Opportunities for Security National and Greystone Housing

0.33

Correlation Coefficient

Security National  Greystone Housing

Weak diversification

The 3 months correlation between Security and Greystone is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Security National Financial and Greystone Housing Impact in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greystone Housing Impact and Security National 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 National Financial are associated (or correlated) with Greystone Housing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greystone Housing Impact has no effect on the direction of Security National i.e., Security National and Greystone Housing go up and down completely randomly.

Pair Corralation between Security National and Greystone Housing

Assuming the 90 days horizon Security National Financial is expected to under-perform the Greystone Housing. But the stock apears to be less risky and, when comparing its historical volatility, Security National Financial is 1.14 times less risky than Greystone Housing. The stock trades about 0.0 of its potential returns per unit of risk. The Greystone Housing Impact is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,148  in Greystone Housing Impact on November 29, 2024 and sell it today you would earn a total of  77.00  from holding Greystone Housing Impact or generate 6.71% return on investment over 90 days.

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

Security National Financial  vs.  Greystone Housing Impact

Security National

Risk-Adjusted Performance

Very Weak

Over the last 90 days Security National Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Security National is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Greystone Housing Impact

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Greystone Housing Impact are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Greystone Housing may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Security National and Greystone Housing

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

The idea behind Security National Financial and Greystone Housing Impact 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.

Check out your portfolio center.

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 Valuation module to check real value of public entities based on technical and fundamental data.