Correlation Between Southern Trust and Woodbrook Group

Can any of the company-specific risk be diversified away by investing in both Southern Trust and Woodbrook Group 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 Southern Trust and Woodbrook Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Southern Trust Securities and Woodbrook Group Holdings, you can compare the effects of market volatilities on Southern Trust and Woodbrook Group 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 Southern Trust with a short position of Woodbrook Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Trust and Woodbrook Group.

Diversification Opportunities for Southern Trust and Woodbrook Group

0.0

Correlation Coefficient

Southern Trust  Woodbrook Group

Pay attention - limited upside

The 3 months correlation between Southern and Woodbrook is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Southern Trust Securities and Woodbrook Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodbrook Group Holdings and Southern Trust 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 Southern Trust Securities are associated (or correlated) with Woodbrook Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodbrook Group Holdings has no effect on the direction of Southern Trust i.e., Southern Trust and Woodbrook Group go up and down completely randomly.

Pair Corralation between Southern Trust and Woodbrook Group

Given the investment horizon of 90 days Southern Trust Securities is expected to under-perform the Woodbrook Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Southern Trust Securities is 5.72 times less risky than Woodbrook Group. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Woodbrook Group Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.66  in Woodbrook Group Holdings on September 5, 2024 and sell it today you would earn a total of  4.46  from holding Woodbrook Group Holdings or generate 675.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Southern Trust Securities  vs.  Woodbrook Group Holdings

Southern Trust Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Southern Trust Securities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, Southern Trust is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Woodbrook Group Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Woodbrook Group Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, Woodbrook Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Southern Trust and Woodbrook Group

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

The idea behind Southern Trust Securities and Woodbrook Group Holdings 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.