Correlation Between TTM TECHNOLOGIES and SECURITAS

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

By analyzing existing cross correlation between TTM TECHNOLOGIES and SECURITAS B , you can compare the effects of market volatilities on TTM TECHNOLOGIES and SECURITAS 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 TTM TECHNOLOGIES with a short position of SECURITAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTM TECHNOLOGIES and SECURITAS.

Diversification Opportunities for TTM TECHNOLOGIES and SECURITAS

0.6

Correlation Coefficient

TTM TECHNOLOGIES  SECURITAS

Poor diversification

The 3 months correlation between TTM and SECURITAS is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding TTM TECHNOLOGIES and SECURITAS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECURITAS B and TTM TECHNOLOGIES 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 TTM TECHNOLOGIES are associated (or correlated) with SECURITAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECURITAS B has no effect on the direction of TTM TECHNOLOGIES i.e., TTM TECHNOLOGIES and SECURITAS go up and down completely randomly.

Pair Corralation between TTM TECHNOLOGIES and SECURITAS

Assuming the 90 days trading horizon TTM TECHNOLOGIES is expected to generate 2.37 times less return on investment than SECURITAS. But when comparing it to its historical volatility, TTM TECHNOLOGIES is 1.84 times less risky than SECURITAS. It trades about 0.16 of its potential returns per unit of risk. SECURITAS B is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  915.00  in SECURITAS B on October 7, 2024 and sell it today you would earn a total of  279.00  from holding SECURITAS B or generate 30.49% return on investment over 90 days.

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

TTM TECHNOLOGIES  vs.  SECURITAS B

TTM TECHNOLOGIES

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TTM TECHNOLOGIES are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, TTM TECHNOLOGIES unveiled solid returns over the last few months and may actually be approaching a breakup point.

SECURITAS B

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SECURITAS B are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SECURITAS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TTM TECHNOLOGIES and SECURITAS

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

The idea behind TTM TECHNOLOGIES and SECURITAS B 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.