Correlation Between YouGov Plc and SECURITAS

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

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

Diversification Opportunities for YouGov Plc and SECURITAS

0.29

Correlation Coefficient

YouGov Plc  SECURITAS

Modest diversification

The 3 months correlation between YouGov and SECURITAS is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding YouGov plc and SECURITAS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECURITAS B and YouGov Plc 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 YouGov plc 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 YouGov Plc i.e., YouGov Plc and SECURITAS go up and down completely randomly.

Pair Corralation between YouGov Plc and SECURITAS

Assuming the 90 days trading horizon YouGov plc is expected to under-perform the SECURITAS. In addition to that, YouGov Plc is 4.77 times more volatile than SECURITAS B . It trades about -0.25 of its total potential returns per unit of risk. SECURITAS B is currently generating about -0.22 per unit of volatility. If you would invest  1,219  in SECURITAS B on October 7, 2024 and sell it today you would lose (25.00) from holding SECURITAS B or give up 2.05% of portfolio value over 90 days.

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

YouGov plc  vs.  SECURITAS B

YouGov plc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YouGov plc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, YouGov Plc is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 YouGov Plc and SECURITAS

The main advantage of trading using opposite YouGov Plc and SECURITAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YouGov Plc 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 YouGov plc 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.