Correlation Between SSI Securities and Industrial Urban

Can any of the company-specific risk be diversified away by investing in both SSI Securities and Industrial Urban 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 SSI Securities and Industrial Urban into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SSI Securities Corp and Industrial Urban Development, you can compare the effects of market volatilities on SSI Securities and Industrial Urban 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 SSI Securities with a short position of Industrial Urban. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSI Securities and Industrial Urban.

Diversification Opportunities for SSI Securities and Industrial Urban

0.56

Correlation Coefficient

SSI Securities  Industrial Urban

Very weak diversification

The 3 months correlation between SSI and Industrial is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SSI Securities Corp and Industrial Urban Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Urban Dev and SSI Securities 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 SSI Securities Corp are associated (or correlated) with Industrial Urban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Urban Dev has no effect on the direction of SSI Securities i.e., SSI Securities and Industrial Urban go up and down completely randomly.

Pair Corralation between SSI Securities and Industrial Urban

Assuming the 90 days trading horizon SSI Securities Corp is expected to generate 2.06 times more return on investment than Industrial Urban. However, SSI Securities is 2.06 times more volatile than Industrial Urban Development. It trades about 0.18 of its potential returns per unit of risk. Industrial Urban Development is currently generating about -0.02 per unit of risk. If you would invest  2,430,000  in SSI Securities Corp on October 4, 2024 and sell it today you would earn a total of  175,000  from holding SSI Securities Corp or generate 7.2% return on investment over 90 days.

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

SSI Securities Corp  vs.  Industrial Urban Development

SSI Securities Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSI Securities Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, SSI Securities is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Industrial Urban Dev

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Industrial Urban Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with SSI Securities and Industrial Urban

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

The idea behind SSI Securities Corp and Industrial Urban Development 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.