Correlation Between STANDARD ALLIANCE and SFS REAL

Can any of the company-specific risk be diversified away by investing in both STANDARD ALLIANCE and SFS REAL 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 STANDARD ALLIANCE and SFS REAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between STANDARD ALLIANCE INSURANCE and SFS REAL ESTATE, you can compare the effects of market volatilities on STANDARD ALLIANCE and SFS REAL 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 STANDARD ALLIANCE with a short position of SFS REAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of STANDARD ALLIANCE and SFS REAL.

Diversification Opportunities for STANDARD ALLIANCE and SFS REAL

-1.0

Correlation Coefficient

STANDARD ALLIANCE  SFS REAL

Pay attention - limited upside

The 3 months correlation between STANDARD and SFS is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding STANDARD ALLIANCE INSURANCE and SFS REAL ESTATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFS REAL ESTATE and STANDARD ALLIANCE 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 STANDARD ALLIANCE INSURANCE are associated (or correlated) with SFS REAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFS REAL ESTATE has no effect on the direction of STANDARD ALLIANCE i.e., STANDARD ALLIANCE and SFS REAL go up and down completely randomly.

Pair Corralation between STANDARD ALLIANCE and SFS REAL

If you would invest  17,945  in SFS REAL ESTATE on October 6, 2024 and sell it today you would earn a total of  0.00  from holding SFS REAL ESTATE or generate 0.0% return on investment over 90 days.

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

STANDARD ALLIANCE INSURANCE  vs.  SFS REAL ESTATE

STANDARD ALLIANCE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STANDARD ALLIANCE INSURANCE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, STANDARD ALLIANCE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

SFS REAL ESTATE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SFS REAL ESTATE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, SFS REAL is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with STANDARD ALLIANCE and SFS REAL

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

The idea behind STANDARD ALLIANCE INSURANCE and SFS REAL ESTATE 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.